Creditors reject Greek proposals; talks to resume today

•     Creditors reject Greek proposals; talks to resume today

–    Creditors say Greek proposals rely too much on tax increases, which can impede growth, rather than spending cuts & structural reforms, which can boost growth

–    Talks will resume today, but ruling SYRIZA coalition didn’t like the original proposals, so it’s likely to like any new proposals that meet the creditors’ requirements even less

–    Greek PM Tsipras will have to get approval by Sunday night, otherwise it may be difficult to get the money in time to pay the IMF

–    Without agreement Sunday, they may have to impose capital controls and Greek banks may not be able to open on Monday

•     EUR largely unaffected, however

–    Stock markets were down, but EUR was generally stronger!

–    USD is moving on expectations for Fed policy now

•     Today:

–    Eurozone: Resumption of talks between Greek PM Tsipras & creditors will be the focus of attention, along with the start of the two-day EU leaders’ summit. Summit will also discuss UK demands for reform of EU as well as Greek issue.

–    Indicators:  German Gfk consumer confidence for July

–    US: Personal income & spending for May. Both forecast to accelerate = USD-positive

–    Speakers:  SNB President Jordan