Greece Versus the ECB - Weekly Analysis

Weekly report for February 9th to 13th, 2015. All event times are GMT.

Greece is centre stage as the country’s finance minister Yanis Varoufakis tries to wear down the ECB and German Finance Minister Walter Schaeuble in tense negotiations over the mountain of government debt. The Eurodollar has come under intense pressure as the wrangling hits daily headlines, not managing to rise much above 1.31. As we get closer to February 28th – aka the crunch date for Greece’s loan agreement - the currency pair could come under more pressure than an un-mined diamond.

On Monday the 9th, there is not much in the way of market-moving data, instead, we expect the trading markets to be news driven, possibly by headlines about the latest Greek debt crisis, ongoing consequences of central bank policies, and the EU’s deflation worries.

Moving onto Tuesday the 10th, China releases its Consumer Price Index for January at 01:30, against a background of renewed concerns that the country’s economy is slowing down. China’s inflation rate was previously at the level of 1.5 percent on an annual basis. Cable traders can be on high alert at 09:30 when the UK releases Industrial Production figures for December, previously at the level of 1.1 percent on a yearly basis.

On Wednesday the 11th, all eyes are on the Bank of England’s Inflation Report at 10:30. Inflation is a very sensitive topic for the BoE right now, as it is directly linked to decisions about raising interest rates in the UK. BoE is most definitely bearish on the whole subject, so watch for GBP action against its rivals when this report comes out.

On Thursday the 12th, there are trading events in Australia, the UK and the US, so let’s get started with Australia. At half-past-midnight, the Unemployment Rate for January is released, previously at the level of 6.1 percent. In the UK, BoE Governor Mark Carney makes his speech at 10:30, with a likely focus on inflation expectations and interest rates. Then, at 13:30, the US releases Retail Sales for January, and this was last reported at the level of minus 0.9 percent.

On Friday the 13th – and obviously we hope it will be lucky for you – attention will be on Germany’s GDP results for the fourth quarter of 2014, released at 07:00. Germany has slipped into deflation, so traders will be looking for further signs of strengths or weakness in the EU’s largest economy. On an annual basis, Germany’s GDP was at the level of 0.1 percent for the quarter. Last but not least, at 10:00 am, the Eurozone’s GDP results for the fourth quarter of 2014 are announced at 10:00, previously at the level of 0.8 percent year-on-year. Will the Euro continue to take a hammering or will the numbers surprise on the upside? The only way to tell is to be there on the day.