Investors are wondering if there will be a day when the headlines will not talk about Greece and this will not impact their trading decision. From White House to Berlin, everyone is talking about Greece and if the country is better to stay in the Eurozone or should the weakest link of the chain be removed. However, it is not that easy at all, and if the policy makers are of mind frame that leaving Greece out of the Eurozone can ease off their headache and smooth sailing will be the outcome, then clearly they are living in a Disney land. Markets around the globe saw a sharp sell off yesterday, as Greece keeps on running out of option, time, patience and most importantly excuses and money.
Nevertheless, the country is set to make another 750 million euro of payment to the IMF today and again the question stands how much juice can you really squeeze out of a dry orange. The blame game continues over Greece payment agreement and it appears that another deadline will pass by on the 11th of May without any fruitful outcome. Moreover, after making a payment today, it will become even more difficult for Greece to complete its next payment of 750 million euros on the 12th of May.
In terms of economic docket, this week is extremely heavy for both the U.S. and for Europe. Today we will kick start this with services PMI data for Germany, Spain, Italy and France. Obviously, it will be France, which has more odds stacked in its favour to miss the expectations or forecast, as history dictates and this could cloud other outcomes of the economic data. Nevertheless, Germany, Spain and Italy are all expected to post a reading which could be higher than the forecast.
Back in the U.K, elections remain the main focus for investors and the uncertainty is impacting economic data. Both manufacturing and construction data have shown disappointing results during the last month due to delay in business investment decisions. The services PMI number which is due today may also dishearten traders once again if they are expecting any kind of uptick reading.
As for the U.S., we have the ADP employment data due later in the day and it is considered as a clue for the upcoming U.S. Non farm data which is due on Friday. Although, history does show that the correlation between the two, is extremely low, but nevertheless, it does provide an indication about the direction. The forecast is for 200K and anything better than that could further stem the idea that the NFP data could print more brawny reading on Friday.