• Here we are again, still writing about Greece. Will a deal be put together that is acceptable to Greece and its creditors? Greece is asking for debt relief, Europe asking for further economic reforms to pensions and taxation. The 11^th hour for Greece is approaching, yet again.
• Markets so far mostly remarkably calm.
• Three key “Greece” meetings tonight: The first is a meeting of Greece’s creditors (EU, ECB, IMF), the second a EuroGroup Finance Ministers meeting, followed by a Euro Summit meeting this evening  (Euro area leaders).
• Reports suggest that Greece has put a proposal to Chancellor Merkel and President Hollande over the weekend, with no reports of whether this is acceptable or not to its creditors. According to anonymous European Commission sources, Greece will be presented with two options: (1) either accept the reforms proposed by Greece’s creditors, potentially with some amendments and with the possibility of a commitment to discuss debt relief later, or (2) accept default.
• Greece still has its €1.5bn payment to the IMF due 30 June (with IMF Managing Director saying ‘there is no grace period’ for this payment) and its finances beyond then far from secure.
• Quiet week for local data.  Weekly Weekly Consumer confidence, ABS’ house prices (Q1), NSW State Budget Tuesday, two job vacancy reports, Q4 population growth and March visitor arrivals and departures, NAB Consumer Anxiety Survey.  Important US and Japan data; China Markit PMI too.

With the exception of debt capital markets, markets have been remarkably calm with no noticeable rise in risk aversion or volatility. In the case of the debt capital markets, primary issuance has been very patchy in Europe and not just because of the typical summer break slowdown. Understandable jitters over Greece, including various meeting dates that have come (and gone) have seen some debt issues being been pulled. But other markets – equities, currencies and bond markets – have not been affected to any material degree.

The markets will first be paying attention to three key meetings scheduled tonight on Greece. The first is a meeting of Greece’s creditors (EU, ECB, IMF), the second a EuroGroup Finance Ministers meeting, followed by a Euro Summit meeting this evening (Euro area leaders).

The President of the EU Donald Tusk (formerly the Prime Minister of Poland) has said that the later Euro Summit will not be negotiating or conducting the technical negotiations with Greece; that is the job of the earlier EuroGroup Finance Ministers meeting to approve.

Reports suggest that Greece has put a proposal to German Chancellor Merkel and French President Hollande over the weekend, with no reports of whether this is acceptable or not to its creditors. According to anonymous European Commission sources, Greece will be presented with two options: (1) either accept the reforms proposed by Greece’s creditors, potentially with some amendments and with the possibility of a commitment to discuss debt relief later, or (2) accept default.

Greece still has its €1.5bn payment to the IMF due 30 June (with IMF Managing Director saying ‘there is no grace period’ for this payment) and its finances beyond then far from secure. At the end of last week, the ECB increased by €1.75bn its Emergency Liquidity Assistance to the National Bank of Greece amid reports of further deposit outflows from Greek banks, wire reports suggesting those outflows were another €1.5bn last week.

Locally this week

It’s another light week for local releases, none of which is likely to impact market pricing or sentiment too much. The data week starts tomorrow with the weekly ANZ-Roy Morgan Consumer Confidence measure that, to date, has held on to its post-Budget rise, in contrast to the Westpac-Melbourne Institute measure that fell an unexpected 6.9% in June on deteriorating expectations.

Tuesday’s local market focus then turns, at least briefly, to the ABS Residential Property Price series, now largely of historical interest only given the market already has most of the June quarter with the monthly CoreLogic RP Data dwelling prices to May (and weekly auction reports since then.) The “hedonic” (quality adjusted) CoreLogic RP Data eight capital city dwelling price series in average quarter terms rose by 2½% in Q1 and we look for a 2.2% gain in the ABS series, taking annual growth to 7.6%.

Also on Tuesday, Australia’s largest State NSW will be releasing its state Budget, which will be buoyed by stamp duty receipts from a booming housing market, with a surplus of $2.1bn expected,

Then Wednesday and Thursday sees the release of the Federal Government’s skilled vacancy index for May (Wednesday) as well as the ABS’ Job Vacancies report for the May quarter (out Thursday). So far this year, job vacancies have not only been rising but at a faster rate than labour force growth, consistent with the more resilient jobs market that’s been seen so far this year.

While not sensitive from a market perspective, two releases on Tuesday and Thursday provide updates on Australia’s population growth and immigration flows, important in the short and medium term for the economy.

Tuesday sees the release of ABS arrivals and departures, including for the short term as well as long term/permanent arrivals and resident departures, that latter component the net overseas immigration component of population growth. As for the short-term migration flows, there are early signs that the depreciation in the Australian dollar is improving Australia’s net international travel balance, travel exports up 13.4% y/y to April 2015, while travel imports were down 4.4% from a marked slowdown in resident departures and slower income growth.

Thursday sees the Statistician’s December quarter estimates of Australia’s population. To the September quarter, population growth was 1.53%, the slowest rate for three years. A slowing in Australia’s population growth has played some part in aiding to cap Australia’s unemployment rate though over the medium to longer term, a slower rate of population growth would limit the economy’s growth potential.

Looking a little further ahead, it’s a big local data week next week with most of the key monthly partials due including RBA credit, house prices for June, building approvals and retail sales, and international trade.

Key international data this week

Relatively quiet in NZ this week after last week’s GDP report. It’s also a quiet week for China, with the most important data release being the preliminary Markit Manufacturing PMI for June (expectations 49.4, prior 49.2), that’s out tomorrow.

There are key data due in the US with the picks likely to include Tuesday’s durable goods orders, watched for the pace of business equipment investment. There is also the May personal income and spending report for May out Thursday that will help the form a more solid assessment of overall consumer spending in the June quarter and also contains the Fed’s targeted measures of consumer inflation, the PCE deflators. Japan has key inflation data for May out Friday while Euro-zone preliminary PMIs are due Tuesday night.

For full analysis, download report:

• Australian Markets Weekly: 22 June 2015 (PDF,501KB)

For further FX, Interest rate and Commodities information visit nab.com.au/nabfinancialmarkets

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