The cloud of the Greek exit once more stood in the way of sunshine for the rest of Europe. From the start of play yesterday the euro continually weakened despite strong data out from across Europe. European Manufacturing Purchasing Managers’ Index (PMI) data came out well above estimates – outlining business growth in the region was at a four-year high. This positivity was all in vain, however, as the euro fell against most major currencies, weakening by nearly 2% against the US dollar and over 1% against sterling. At the start of a day a Greek deal appeared near as its creditors said that the new proposals put forward were very close to what was needed. However, the euro weakened as concerns mounted that even if a deal was agreed between Greece and its creditors, the Greek Government would struggle to get the necessary reforms approved by parliament.
Today’s German Ifo Business Climate data would usually be a leading factor in changes to the market. Today it seems like folly to suggest so, as the main attention will be on Greece and whether or not it can finally get a deal agreed; however, various news sources this morning are suggesting that divisions are still evident in the EU and the IMF. There will also be Eurogroup meetings all day where, no doubt, talks will be about Greece.