Emergency EU summit called after no deal at Eurogroup

•       Emergency EU summit called after no deal at Eurogroup

•      EU leaders will hold an emergency summit on Monday ahead of the already planned for Jun.25-26 meeting. This comes after Eurogroup failed again to bridge the gap between Greece and its creditors.

•      Talks now move to the highest political level.

•      Without a deal, Greece is likely to default as it has a crucial payment due to the IMF end of June and the four months extension of the rescue program expires.

•      ECB will hold an unscheduled call to discuss ELA available to Greek banks as savers speed up withdrawals (ECB raised Greece’s ELA level by 1,1bn on Wedn).

•      Heightened concerns that Greece may need to introduce capital controls as the banks may not have enough liquidity to open on Monday. This could be EUR-negative.

•      DAX futures, Eurostoxx 50 are also likely to come under increased selling pressure. 

•      BoJ remains on hold, as expected

•      Maintained its positive view of the economy.

•      October still seems the most likely time for any further stimulus, in our view.

•      The Bank will also reduce the number of its policy meetings from 14 to 8, starting from Jan. 2016, and issue more frequently its long-term economic outlook and prices.

•      Today:

•      Eurozone: Current account balance for April. Usually not major market mover. 

•      Canada: CPI for May. The market is likely to focus on the core rate, which is expected to decelerate somewhat. This could be CAD-negative. 

•      Speakers: San Francisco Fed President John Williams, Cleveland Fed President Loretta Mester and Norges Bank Governor Oeystein Olsen.