Greece fights against a temporary Grexit plan

•      Greece fights against a temporary Grexit plan

•      Eurogroup meeting on Saturday ended with no deal, resumed on Sunday…again no deal!

•      Eurozone leaders’ summit started on Sunday and still no deal has being reached.

•      Few details available of what a compromise entails show two points Greece is resisting:

•      Greece is against the involvement of the IMF in the post 2016 rescue package (the only institution that recognizes the country needs debt relief).

•      Creditors demand state assets worth of 50bn to be privatized with the proceeds transferred to an external fund to pay down the debt

•      If no deal is agreed, Greece will be offered a five year “time-out” from the Eurozone, to restructure its debts.

•      EUR opened with a small gap but recovered, Asian stock markets moved higher. DAX and Eurostoxx could advance a bit as well.

•      The highlight of the week will be Fed Yellen’s semi-annual testimony to Congress (Wednesday & Thursday):

•      Given the international developments in Greece, China and the IMF’s call for Fed to remain on hold until 2016, we will be looking to see if there are any comments to indicate that the Fed is still on track to raise rates.

•      Today: 

                    No major releases on the schedule, focus will be on the                       outcome of the Greek talks

•      This week:

•      Tuesday: UK CPI for June, German ZEW survey for July

•      Wednesday: Bank of Japan and Bank of Canada policy 

     meetings: Expectations are for the BoJ to remain on hold, while the BoC to cut rates by 25bps = CAD-negative.

•      Thursday: ECB policy meeting. The focus will be on the press conference after the meeting and much will depend on what will happen with Greece today.

Friday: US and Canada CPI rates for June.