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Greece is back on the radar and the county’s next repayment is due in ten days, and the sell-off has already begun. The Athens officials are quite hopeful about achieving the third bailout, but traders don’t share their optimistic outlook. The Greece government seem to think getting its hands on the money will be a doddle, but some creditors are not so willing to hand over the cash just like that.
Whatever the outcome is, Greece will need a bridging loan to prop up its banking sector and that will cause havoc in the financial markets. Athens is running out of friends in the EU, and negotiating the next bailout will entail adhering to tough austerity which will lead to top level instability within the Syriza party. The battle between Brussels and Athens is gearing up for it next round, and traders are trying not to get caught in the cross fire.
The sharp drop in Chinese imports over the weekend has strengthened the argument the nation is no longer minerals hungry, and the mining companies are suffering on the back of it.
We are expecting the Dow Jones to open broadly unchanged at 17,375, as the by-and-large positive jobs data on Friday has traders worried about an interest rate hike next month. There was nothing really that stood out in the jobs report, but it was a solid number and there is no way dealers can dismiss the possibility of an interest rate rise in September.
The US corporate reporting season is coming to an end, and the Federal Reserve meeting next month will take centre stage.