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All roads lead to Greece this week as Tuesday’s debt deadline is set to govern market direction and volatility. Prime Minister Tsipras gained approval from Parliament over the weekend to hold a referendum on the proposed bailout terms. Set to occur on July 5, the move has received widespread condemnation with the Financial Times posting the headline, “Tsipras takes Greece to the edge of the precipice.”
On the economic front, important Non-Farm Payrolls, Factory Orders, Consumer Confidence, Construction Spending and Auto Sales data will be released.
Greek banks will be closed on Monday with Prime Minister Tsipras confirming that capital controls would be imposed to stave off a possible collapse. Limited to €60 withdrawals, locals would be unable to transfer funds overseas unless commercially approved.
Dow futures are pointing to heavy losses on Monday. Pending Home Sales for May will be announced at 10 am with the market factoring in a rise of 4.0% for the period.
Tuesday will be an important date in the European calendar with a Greek debt payment due to the IMF. Failure to fulfill these obligations could lead to a default and ultimately an exit from the euro.
Economically, Consumer Confidence data will be announced at 10 am on Tuesday with an expectation of 97.5. This is considerably higher than May’s result of 95.4. Other economic releases that could influence market movements include Chicago PMI and the Case Shiller City Index.
Construction Spending, ISM Index and ADP Employment Change will be notable economic announcements on Wednesday. Forecasting a softening in spending for the month of May, the Automatic Data Processing employment data is expected to rise to 216,000. Economists take note of this figure as it can provide insight into jobs leading up to Non-Farm Payrolls.
Thursday is jobs day with Non-Farm Payrolls, Average Hourly Earnings, the Unemployment Rate and Unemployment Claims set to be released in the morning. The Bureau of Labor’s NFP report is expected to come in at 231,000, below last month’s 280,000. Economists are factoring in an unemployment rate of 5.4% and Claims of 270,000.
No important dividend stock earnings on Thursday.
Quiet session on the economic front on Friday with all eyes on Greece’s proposed referendum. Tuesday and Thursday’s events will determine end-of-week market sentiment.
No important dividend stocks earnings on Friday.
Greek Prime Minister Tsipras’ move to hold a referendum could prove costly with the market beginning to price in a euro exit. Germany’s Chancellor Merkel and U.S. President Obama discussed the situation in length over the weekend, agreeing that a “Grexit” would be hazardous to the global economy and growth forecasts.