Greece suspended June 5 payment deadline by bundling it with other payments scheduled for June. Meanwhile, market awaits Nonfarm Payrolls as hopes for improved figures slowly reduced by lower-than-expected figures on other reports that was released earlier this week.

In the battle of proposal between Greece and its creditors, both parties have decided to stick with their own, lengthen the discussion even further and spur Greece to suspend June 5 payment deadline to IMF by bundling it with other payments scheduled for June. Meanwhile, market awaits Nonfarm Payrolls data that will be released in the US later today as hopes for improved figures slowly reduced by lower-than-expected figures on other reports that was released earlier this week.

 

Utang

 

Buying Time

Yesterday (4/6), Athena decided to bundle together the four payments to IMF that was scheduled to be paid in stages within June. It means, Greece can pass off the first deadline at June 5 and suspend payments for overall bill until June 30. This step previously has been known as an available alternative that the Greeks won't touch as one Greece official said so. Therefore, the current decision is probably Greece's trick to buy time in prolonging the discussion till the last seconds with hopes the bailout funds can be available before the deadline, with or without a final agreement. 


Greece and its creditors has seen each other's proposal, but a compromise is not yet reached. Greece Prime Minister Alexis Tsipras reportedly told German Chancellor Angela Merkel and France President Francois Hollande that the proposal given by its creditors cannot be the base of aggreement because it does not include the common grounds in technical level that was agreed in Brussel talks in the last few months. He also insisted on Greece proposal as the only realistic one on the table. 


European Union and ECB officials continue to say to the public that they don't want Greece to exit the Euro, but there has been no signal they will accept Greece's proposal. The newest package offered by IMF and Europe demanded Greece to run on austerity again, including cutting pensions, hauling job market, hiking taxes, and many others that are considered harmful by the Greeks. While Greece's proposal give little concession in shape of hiking luxury goods and recreational facilities taxes, but refuse to even touch pension cuts and other clauses that are considered important by Europe.

 

Rhetorics

Postponed payment deadline allowed the market that concernce about Greece debt to breathe easier for the time being. However, till the real deadline fall in the end of June, there should be rhetorics thrown around by Greece, IMF, and European officials. In effect, June has turned into a particularly risky month for traders. For now, NFP will take market attention, followed by FOMC meeting next week; but afterward, the lack of high impact news might lead the war on rhetorics to take center stage.


Meanwhile, upcoming NFP figures becomes increasingly difficult to predict with big banks quoted numbers starting from 210,000 up to 275,000 earlier this week and Reuters quoted a consensus that estimate slight increase from 223,000 in April to 225,000 in May with jobless rate stay at 5.4%. The unexpectedly disappointing ISM Non-manufacturing and UoM consumer sentiment has shifted expectations lower, but general estimate put NFP at more than 200,000. Nevertheless, simply a little above 200,000 may not be able to drive the Dollar higher; particularly because records on wages growth will be out at the same time and worth a look in the current low inflation environment.