Greece: confusion and disarray

•     Greece: confusion and disarray

–    ECB surprises everyone by increasing the haircut on Greek govt collateral; banks to remain closed for at least two more days. Increases pressure on Greek govt

–    Greece to make proposal today based on previous EC proposal, but since Greek economy has deteriorated, this probably won’t go far enough. Greek paper reports that 16 of the other 18 Eurozone countries want Greece out. Things look grim.

–    EUR likely to fall further if Greece exits; high-beta commodity currencies too

•     RBA keeps rates unchanged, as expected

•     Chinese stocks fall further despite govt support measures

–    Chinese stocks off over 30% from peak in just 3 weeks or so

–    Govt suspended IPOs, central bank provides funds for margin trading, etc. but no luck

–    Fall hits consumer confidence, show underlying weak economy = bad for commodities

•     Oil prices collapse on China, Iran deal, continued high US supply

–    Bad news for commodity currencies – NOK, CAD, RUB down sharply

•     Today:

–    Eurozone: EU leaders’ emergency summit meeting on Greece; INDICATORS:  German industrial production for May

–    UK:  Industrial production for May expected to fall mom but accelerate yoy

–    US: JOLTS job openings in May expected to be a bit lower; trade balance