Greece is set to submit a request to extend the loan – not exactly what Germany accepts but taking a step towards its partners. Will this fly or die on arrival? Greek PM Akexis Tsipras said negotiations are at a critical point.
Indeed, time seems to be running out. Here are some updates on EUR/USD:
Germany wanted Greece to apply for an extension of the current program that the Greek government was elected to abolish. After negotiations, Greece agreed to submit an extension, but only to the loan and with different conditions. It delayed the submission of the proposal by one day in order to fine tune the deal.
German Chancellor Angela Merkel said solidarity is a two way street. While she maintains the tough line, this isn’t exactly the “take it or leave it” approach portrayed by her finance minister Wolfgang Schäuble. We noted that a summit between the heads of state might be necessary for a breakthrough.
The ECB, which stopped accepting Greek bonds as collateral two weeks ago, continued providing the country the Emergency Liquidity Assistance (ELA). However, Greece wanted an expansion to €70 billion and the Frankfurt based institution approved only €68.3 billion. The pressure is on.
Other EUR/USD developments
The same ECB is set to release its first ever meeting minutes at 12:30 GMT today. It will be interesting to see how worried they were about deflation, and how strong the German opposition was to the historic QE decision.
In the US, the FOMC Meeting Minutes showed a more dovish picture than the statement: officials are concerned about geo-political developments, mentioned the strength of the dollar and lower inflation. However, if one does not dissect every word, the song remains basically the same and the minutes are from a meeting that happened before the excellent Non-Farm Payrolls report. Fed Chair Yellen is set to testify on February 24th in the famous “Humphrey Hawkins” event.
The US releases jobless claims and the Philly Fed Manufacturing Index later on.
Here is how it looks on the chart:
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