Greece calls referendum on creditors’ proposals, shuts banks

•     Greece calls referendum on creditors’ proposals, shuts banks

–    Referendum will be held 5 July; banks to remain closed at least until then

–    Government urges the people to reject the proposal! I expect though that they’ll say “yes,” but you never know – pride is a big motivating force in international relations

•     EU & IMF lose patience with Greece, refuse to extend bailout

–    Greece will exit from its bailout program on Tuesday, probably won’t be able to make payment to IMF as scheduled = will fall into arrears (not default)

•     ECB to maintain ELA at current level but not expand it

–    Trying to remain neutral:  they aren’t pulling the plug, but they aren’t increasing their help, either. But will “use all the instruments available” to keep markets stable

•     Greek exit from Eurozone would be disaster as it would introduce FX risk into the euro for the first time

•     Today:

–    Eurozone: German CPI for June expected to slow on yoy basis = EUR negative?

–    US: Pending home sales for May

•     This week:

–    Tuesday: Spotlight on Greek payment to IMF. UK:  final estimate of Q1 GPD

–    Wednesday: Japan tankan report; US ADP employment report

–    Thursday:  June nonfarm payrolls expected @ 225k = USD-positive. Swedish Riksbank meeting likely to keep rates on hold

–    Friday:  final service-sector PMIs for June