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Euro and Greek bonds hit by bailout fears -- live updates Euro and Greek bonds hit by bailout fears -- live updates
(35 minutes later)
5.45pm BST17:45
Greek two year bonds have continued to come under pressure, with the yield rising from 23.09% on Monday to 25.5%.
5.09pm BST17:095.09pm BST17:09
After all the confusion, this may be the upshot of the various meetings:After all the confusion, this may be the upshot of the various meetings:
#Greece & their lenders to begin a teleconference today & are to discuss a potential deal in a meeting tomorrow in Brussels (@RANsquawk)#Greece & their lenders to begin a teleconference today & are to discuss a potential deal in a meeting tomorrow in Brussels (@RANsquawk)
4.48pm BST16:484.48pm BST16:48
US to press Europe over Greece when G7 finance ministers meetUS to press Europe over Greece when G7 finance ministers meet
The US is likely to press Europe to reach a deal on Greece, when G7 finance ministers meet in Germany on Thursday and Friday this week, Reuters reports.The US is likely to press Europe to reach a deal on Greece, when G7 finance ministers meet in Germany on Thursday and Friday this week, Reuters reports.
Greece is not formally on the agenda, but is likely to be discussed on the sidelines of the gathering (a familiar pattern). An official told Reuters:Greece is not formally on the agenda, but is likely to be discussed on the sidelines of the gathering (a familiar pattern). An official told Reuters:
I would expect the Americans to put pressure on the Europeans in Dresden about Greece. The Americans are stressing the geopolitical risks and telling us we have to find a solution, that we cannot really put the euro area and Europe at risk because of Greece.I would expect the Americans to put pressure on the Europeans in Dresden about Greece. The Americans are stressing the geopolitical risks and telling us we have to find a solution, that we cannot really put the euro area and Europe at risk because of Greece.
If Greece for some reason were to turn to Russia and Moscow would get involved more, they could get too much influence inside NATO and inside the EU when it comes to policies towards Russia.If Greece for some reason were to turn to Russia and Moscow would get involved more, they could get too much influence inside NATO and inside the EU when it comes to policies towards Russia.
3.13pm BST15:133.13pm BST15:13
More US data, with consumer confidence and new home sales both beating expectations.More US data, with consumer confidence and new home sales both beating expectations.
According to Conference Board figures, the May consumer confidence index came in at 95.4, up from a revised 94.3 in April and better than the expected 94.9.According to Conference Board figures, the May consumer confidence index came in at 95.4, up from a revised 94.3 in April and better than the expected 94.9.
Meanwhile single family home sales jumped 6.8% to a seasonally adjusted annual rate of 517,000 units, above forecasts of 510,000. March’s figure was revised up from 481,000 to 484,000.Meanwhile single family home sales jumped 6.8% to a seasonally adjusted annual rate of 517,000 units, above forecasts of 510,000. March’s figure was revised up from 481,000 to 484,000.
But the strength of the dollar - currently around an eight year high against the yen - has put a dampener on the US stock market, with the Dow Jones Industrial Average down 152 points or 0.84%. The US currency has been lifted by Friday’s comments from US Federal Reserve chair Janet Yellen suggesting that, while a rate rise is not imminent, it could happen later in the year if the economy improves as expected. The consumer confidence and homes data today seems to feed into that theory.But the strength of the dollar - currently around an eight year high against the yen - has put a dampener on the US stock market, with the Dow Jones Industrial Average down 152 points or 0.84%. The US currency has been lifted by Friday’s comments from US Federal Reserve chair Janet Yellen suggesting that, while a rate rise is not imminent, it could happen later in the year if the economy improves as expected. The consumer confidence and homes data today seems to feed into that theory.
3.02pm BST15:023.02pm BST15:02
European commission president Jean-Claude Juncker for one reckons there is a growing belief that a Greek default can be avoided. Juncker told the MNI news agency:European commission president Jean-Claude Juncker for one reckons there is a growing belief that a Greek default can be avoided. Juncker told the MNI news agency:
My impression after talking to a series of colleagues is that the feeling is growing that a default should be avoided.My impression after talking to a series of colleagues is that the feeling is growing that a default should be avoided.
On the other hand all those I’ve spoken to are insisting on the involvement of the (International Monetary Fund). No deal without the agreement of the IMF.On the other hand all those I’ve spoken to are insisting on the involvement of the (International Monetary Fund). No deal without the agreement of the IMF.
2.49pm BST14:492.49pm BST14:49
Back in the US, and new figures show that service sector growth slowed for the third month in a row in May.Back in the US, and new figures show that service sector growth slowed for the third month in a row in May.
The Markit preliminary purchasing managers index for services came in at 56.4, down from 57.4 in April . The composite index - an average of manufacturing and services - fell to 56.1 from 57 in April. Markit chief economist Chris Williamson said:The Markit preliminary purchasing managers index for services came in at 56.4, down from 57.4 in April . The composite index - an average of manufacturing and services - fell to 56.1 from 57 in April. Markit chief economist Chris Williamson said:
The rate of expansion remains below the buoyant rates seen throughout much of last year, as slower growth of service activity has been accompanied by a slowdown in the manufacturing sector, which has seen exporters hit by the stronger dollar.The rate of expansion remains below the buoyant rates seen throughout much of last year, as slower growth of service activity has been accompanied by a slowdown in the manufacturing sector, which has seen exporters hit by the stronger dollar.
2.37pm BST14:372.37pm BST14:37
Apparently it’s now a teleconference this afternoon between Greece and its creditors.Apparently it’s now a teleconference this afternoon between Greece and its creditors.
Government Official: Greek creditors are to hold a teleconference today, meet tomorrow - BBGGovernment Official: Greek creditors are to hold a teleconference today, meet tomorrow - BBG
Updated at 2.37pm BSTUpdated at 2.37pm BST
2.31pm BST14:312.31pm BST14:31
And the sense of frustration is palpable:And the sense of frustration is palpable:
Another day was wasted talking abt possible tax on withdrawals from ATMs. Still going around in circles after 4 months in office #GreeceAnother day was wasted talking abt possible tax on withdrawals from ATMs. Still going around in circles after 4 months in office #Greece
Drafting & re-drafting is a great process to reach gd deal. Throwing weird (non-reforming) proposals & retracting w/in 1 hour, not so much.Drafting & re-drafting is a great process to reach gd deal. Throwing weird (non-reforming) proposals & retracting w/in 1 hour, not so much.
Updated at 2.34pm BSTUpdated at 2.34pm BST
2.28pm BST14:282.28pm BST14:28
The idea of Greece consolidating all the payments due to the IMF in June into one lump sum could be risky unless a deal is done with its creditors. Here’s the full Reuters’ report on the idea:The idea of Greece consolidating all the payments due to the IMF in June into one lump sum could be risky unless a deal is done with its creditors. Here’s the full Reuters’ report on the idea:
Cash-strapped Greece could avoid paying back the IMF on June 5 and win more time to negotiate a funding deal without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month, officials said on Tuesday.Cash-strapped Greece could avoid paying back the IMF on June 5 and win more time to negotiate a funding deal without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month, officials said on Tuesday.
Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four instalments due in June that total 1.6 billion euros.Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four instalments due in June that total 1.6 billion euros.
Cut off from markets, Athens has said it will not be able to make the June 5 payment without new loans from the euro zone, which insists it can only lend Greece more if the country agrees to reforms that would make its debt sustainable.Cut off from markets, Athens has said it will not be able to make the June 5 payment without new loans from the euro zone, which insists it can only lend Greece more if the country agrees to reforms that would make its debt sustainable.
“There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment,” a senior euro zone official close to the talks with Athens said.“There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment,” a senior euro zone official close to the talks with Athens said.
A second official close to the talks also acknowledged that possibility.A second official close to the talks also acknowledged that possibility.
“That’s basically a technical treasury exercise and they could tell the IMF that this is how they want to do it and the IMF would probably have to be OK with that,” the first official said.“That’s basically a technical treasury exercise and they could tell the IMF that this is how they want to do it and the IMF would probably have to be OK with that,” the first official said.
But the officials noted that Greece could only use such a trick if there was a credible prospect of a funding deal that could be communicated to markets and its citizens. Otherwise, the missed payment could trigger market panic and a bank run in Greece.But the officials noted that Greece could only use such a trick if there was a credible prospect of a funding deal that could be communicated to markets and its citizens. Otherwise, the missed payment could trigger market panic and a bank run in Greece.
“So they would get a few extra weeks. But unless there is some perspective how they would deal with this full payment, it would be a risky thing for the Greeks to do. And the consequences would be unpredictable,” said the first official.“So they would get a few extra weeks. But unless there is some perspective how they would deal with this full payment, it would be a risky thing for the Greeks to do. And the consequences would be unpredictable,” said the first official.
“People could want to withdraw their savings and who knows what Greece would have to do.”“People could want to withdraw their savings and who knows what Greece would have to do.”
2.27pm BST14:272.27pm BST14:27
On the other hand... Efi Koutsokosta, Euronews’s Brussels correspondent, reckons that negotiations between Greece are continuing.....On the other hand... Efi Koutsokosta, Euronews’s Brussels correspondent, reckons that negotiations between Greece are continuing.....
Technical contacts for #Greece taking place today as scheduled, #brusselsgroup tomorrow- Not cancelled according to EU Commission sources.Technical contacts for #Greece taking place today as scheduled, #brusselsgroup tomorrow- Not cancelled according to EU Commission sources.
2.20pm BST14:202.20pm BST14:20
Now the Greek finance ministry is saying (according to Reuters) that a banking transaction tax and a levy on ATM withdrawals is “no longer” being discussed in talks with EU/IMF lenders. Not clear what that means if the talks have in fact been cancelled, however.Now the Greek finance ministry is saying (according to Reuters) that a banking transaction tax and a levy on ATM withdrawals is “no longer” being discussed in talks with EU/IMF lenders. Not clear what that means if the talks have in fact been cancelled, however.
2.13pm BST14:132.13pm BST14:13
Eurozone official: No deal by ThursdayEurozone official: No deal by Thursday
An unnamed eurozone official has warned that progress is still too low, and ruled out a deal by Thursday.An unnamed eurozone official has warned that progress is still too low, and ruled out a deal by Thursday.
They also criticised the Athens side for not producing credible proposals for VAT reforms, which rather undermines the argument that a deal is close.They also criticised the Athens side for not producing credible proposals for VAT reforms, which rather undermines the argument that a deal is close.
Here’s the news flashes off the Reuters terminal:Here’s the news flashes off the Reuters terminal:
2.10pm BST14:102.10pm BST14:10
Enikos is also reporting that today’s talks between Greece and creditors is off.Enikos is also reporting that today’s talks between Greece and creditors is off.
They say:They say:
The scheduled meeting of the so-called Brussels Group on the Greek bailout has been cancelled.The scheduled meeting of the so-called Brussels Group on the Greek bailout has been cancelled.
A Greek senior official did not give a reason for the cancellation of the meeting that was due to be held on Tuesday afternoon.A Greek senior official did not give a reason for the cancellation of the meeting that was due to be held on Tuesday afternoon.
#Brussels Group meeting cancelled #Greece #bailout- BREAKING - http://t.co/VPVGb8mbYs pic.twitter.com/UMIB0cVBkX#Brussels Group meeting cancelled #Greece #bailout- BREAKING - http://t.co/VPVGb8mbYs pic.twitter.com/UMIB0cVBkX
2.06pm BST14:062.06pm BST14:06
Interesting..... talks between Greece and its creditors in Brussels have been ‘postponed’, according to Greek financial website Capital.grInteresting..... talks between Greece and its creditors in Brussels have been ‘postponed’, according to Greek financial website Capital.gr
Today's #BrusselsGroup meeting is postponed. Oops... #Greece https://t.co/TncsLt7Q5IToday's #BrusselsGroup meeting is postponed. Oops... #Greece https://t.co/TncsLt7Q5I
2.02pm BST14:022.02pm BST14:02
Summary: Greek fears swirl againSummary: Greek fears swirl again
Time for a quick recap.Time for a quick recap.
Concerns that Greece might fail to meet the €1.6bn repayments due to the International Monetary Fund have hit Europe’s financial markets today.Concerns that Greece might fail to meet the €1.6bn repayments due to the International Monetary Fund have hit Europe’s financial markets today.
The euro slipped to a one-month low against the US dollar, below $1.09, after several Greek ministers claimed that Athens could miss the first repayment, on June 5.The euro slipped to a one-month low against the US dollar, below $1.09, after several Greek ministers claimed that Athens could miss the first repayment, on June 5.
Deputy Minister of Social Insurance Dimitris Stratoulis told Mega TV this morning that:Deputy Minister of Social Insurance Dimitris Stratoulis told Mega TV this morning that:
If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, education”.If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, education”.
Greek bonds have also hit their weakest point in weeks, after finance minister Yanis Varoufakis criticised Greece’s creditors for insisting on more austerity.Greek bonds have also hit their weakest point in weeks, after finance minister Yanis Varoufakis criticised Greece’s creditors for insisting on more austerity.
Greek 2yr yields jump to almost 25% on more Greek noise. #ECB’s Hansson says agreement on #Greece ‘not in sight’ yet. pic.twitter.com/83UPNUBC3QGreek 2yr yields jump to almost 25% on more Greek noise. #ECB’s Hansson says agreement on #Greece ‘not in sight’ yet. pic.twitter.com/83UPNUBC3Q
Varoufakis has told reporters in Athens that Greece will repay the IMF, because a deal will be reached by June 5th. He also apparently suggested that a small levy on bank withdrawals could be imposed.Varoufakis has told reporters in Athens that Greece will repay the IMF, because a deal will be reached by June 5th. He also apparently suggested that a small levy on bank withdrawals could be imposed.
Greek officials were due to talk to creditors in Brussels again today, in an attempt to bridge the gap on key issues including pensions, labour market reforms and VAT rates.Greek officials were due to talk to creditors in Brussels again today, in an attempt to bridge the gap on key issues including pensions, labour market reforms and VAT rates.
The New Democracy opposition party has criticised prime minister Tsipras for not reaching a deal, four months after taking office.The New Democracy opposition party has criticised prime minister Tsipras for not reaching a deal, four months after taking office.
Despite the deadlock, analysts at Eurasia believe a deal will be reached in time.Despite the deadlock, analysts at Eurasia believe a deal will be reached in time.
Updated at 2.07pm BSTUpdated at 2.07pm BST
1.38pm BST13:381.38pm BST13:38
Finally, some economic data is hitting the wires, from America.Finally, some economic data is hitting the wires, from America.
And the news is that durable goods orders, excluding the volatile aircraft orders, jumped by 1.0% in April. That’s stronger than expected.And the news is that durable goods orders, excluding the volatile aircraft orders, jumped by 1.0% in April. That’s stronger than expected.
March’s reading has been revised higher too, helping to give the US dollar another nudge higher.March’s reading has been revised higher too, helping to give the US dollar another nudge higher.
Really solid durable goods number. This is the kind of report we've been waiting awhile to see. http://t.co/hHgcY3iFmiReally solid durable goods number. This is the kind of report we've been waiting awhile to see. http://t.co/hHgcY3iFmi
Major upward revisions to prior months. And solid beats on the core numbers.Major upward revisions to prior months. And solid beats on the core numbers.
Updated at 1.44pm BSTUpdated at 1.44pm BST
1.29pm BST13:291.29pm BST13:29
The trial of Tom Hayes, the former UBS and Citigroup trader accused of manipulating the Libor rate, has begun at Southwark Crown Court in London.The trial of Tom Hayes, the former UBS and Citigroup trader accused of manipulating the Libor rate, has begun at Southwark Crown Court in London.
Here’s our early take:Here’s our early take:
A trader was motivated by greed as he acted as “ringmaster” in a “thoroughly dishonest and manipulative manner” to rig interbank lending rates, a court has heard.A trader was motivated by greed as he acted as “ringmaster” in a “thoroughly dishonest and manipulative manner” to rig interbank lending rates, a court has heard.
Tom Hayes, 35, whose trial began on Tuesday, is alleged to have done “everything in his power” to manipulate the rates, known as Libor.Tom Hayes, 35, whose trial began on Tuesday, is alleged to have done “everything in his power” to manipulate the rates, known as Libor.
The former UBS and Citigroup trader, of Fleet, Hampshire, denies eight counts of conspiracy to defraud, covering a period from 2006 to 2010.The former UBS and Citigroup trader, of Fleet, Hampshire, denies eight counts of conspiracy to defraud, covering a period from 2006 to 2010.
Mukul Chawla QC, prosecuting, said: “This case is about the dishonest rigging of bank rates for profit.” Chawla said of Hayes: “He behaved in a thoroughly dishonest and manipulative manner by repeatedly cheating those with whom he had entered into huge financial transactions. The motive was a simple one: it was greed.”Mukul Chawla QC, prosecuting, said: “This case is about the dishonest rigging of bank rates for profit.” Chawla said of Hayes: “He behaved in a thoroughly dishonest and manipulative manner by repeatedly cheating those with whom he had entered into huge financial transactions. The motive was a simple one: it was greed.”
He added: “He was the ringmaster at the very centre, telling others around him what to do and in a number of cases rewarding them for their dishonest assistance.”He added: “He was the ringmaster at the very centre, telling others around him what to do and in a number of cases rewarding them for their dishonest assistance.”
More here:More here:
Related: Libor trial: trader driven by greed was 'ringmaster' in rate-rigging conspiracy, court hearsRelated: Libor trial: trader driven by greed was 'ringmaster' in rate-rigging conspiracy, court hears
Updated at 1.29pm BSTUpdated at 1.29pm BST
1.15pm BST13:151.15pm BST13:15
Mujtaba Rahman, analyst at Eurasia Group, reckons that Greece will probably reach a deal with the eurozone in time.Mujtaba Rahman, analyst at Eurasia Group, reckons that Greece will probably reach a deal with the eurozone in time.
Despite the inflammatory talk of defying Greece’s creditors, Rahman believes that a compromise will be hammered out; and that Alexis Tsipras will only suffer a handful of defections.Despite the inflammatory talk of defying Greece’s creditors, Rahman believes that a compromise will be hammered out; and that Alexis Tsipras will only suffer a handful of defections.
He writes:He writes:
We continue to believe Tsipras will lose around 5-10 lawmakers from his coalition when the package is presented to parliament (potentially attached to a vote of confidence). But we suspect he will lose less than 12 MP’s allowing him to keep his parliamentary majority.We continue to believe Tsipras will lose around 5-10 lawmakers from his coalition when the package is presented to parliament (potentially attached to a vote of confidence). But we suspect he will lose less than 12 MP’s allowing him to keep his parliamentary majority.
The key factor is energy minister Panagiotis Lafazanis, a leading light in Syriza who controls around 30 MPs through his Left Platform.The key factor is energy minister Panagiotis Lafazanis, a leading light in Syriza who controls around 30 MPs through his Left Platform.
Rahman explains:Rahman explains:
Albeit ideological, Lafazanis is a team player who understands the government and party’s needs need to come before those of the Left Platform, and importantly, believes Syriza can make a difference in government. He will therefore want to avoid creating the circumstances that could result in a National Unity government in which Syriza’s influence would be heavily diluted.Albeit ideological, Lafazanis is a team player who understands the government and party’s needs need to come before those of the Left Platform, and importantly, believes Syriza can make a difference in government. He will therefore want to avoid creating the circumstances that could result in a National Unity government in which Syriza’s influence would be heavily diluted.
While Lafazanis will not support any deal, concessions over the fiscal primary surplus, labour and pensions should be enough to keep him and his MP’s in line. Moreover, Lafazanis has a lot of meddling power outside of parliament with the capacity to delay and water down implementation of reforms once they are legislated, as well as to challenge them in court. This affords him another less destructive avenue to express his disagreement with the deal rather than overthrowing the government.While Lafazanis will not support any deal, concessions over the fiscal primary surplus, labour and pensions should be enough to keep him and his MP’s in line. Moreover, Lafazanis has a lot of meddling power outside of parliament with the capacity to delay and water down implementation of reforms once they are legislated, as well as to challenge them in court. This affords him another less destructive avenue to express his disagreement with the deal rather than overthrowing the government.
However, it’s not clear how Tsipras’s junior coalition partner, the Independent Greeks, will react.However, it’s not clear how Tsipras’s junior coalition partner, the Independent Greeks, will react.
Rahman also flags up House Speaker Zoe Konstantopoulou, who could look to “claim the anti-austerity mantle” from Tsipras.Rahman also flags up House Speaker Zoe Konstantopoulou, who could look to “claim the anti-austerity mantle” from Tsipras.
12.38pm BST12:3812.38pm BST12:38
#Varoufakis tells journos govt mulls imposing a small tax on cash withdrawals from ATMs to give incentive to use credit cards #Greece#Varoufakis tells journos govt mulls imposing a small tax on cash withdrawals from ATMs to give incentive to use credit cards #Greece
12.32pm BST12:3212.32pm BST12:32
Yanis Varoufakis has apparently also indicated today that Greek savers might incur a ‘small’ fee when they use a machine [he’s been speaking to reporters in Athens].Yanis Varoufakis has apparently also indicated today that Greek savers might incur a ‘small’ fee when they use a machine [he’s been speaking to reporters in Athens].
#Greece FinMin Varoufakis says there may be 'a small' levy on bank withdrawals via ATMs.#Greece FinMin Varoufakis says there may be 'a small' levy on bank withdrawals via ATMs.
This idea has been floating around for some time; one report suggested a €1 fee for withdrawals up to €1,000 (which wouldn’t raise much money or deter a bank run)This idea has been floating around for some time; one report suggested a €1 fee for withdrawals up to €1,000 (which wouldn’t raise much money or deter a bank run)
12.19pm BST12:1912.19pm BST12:19
Greek opposition criticise prime minister TsiprasGreek opposition criticise prime minister Tsipras
Over in Athens the main opposition party has issued a withering attack on the government, saying that Greece is being ruled by a party where 40 percent want to take the country out of the euro.Over in Athens the main opposition party has issued a withering attack on the government, saying that Greece is being ruled by a party where 40 percent want to take the country out of the euro.
Our correspondent Helena Smith reports:Our correspondent Helena Smith reports:
As the clock ticks, the rhetoric gets ever higher with Kyriakos Mitsotakis, the parliamentary spokesman of the main opposition New Democracy party, this morning accusing the prime minister of being unable to control his party.As the clock ticks, the rhetoric gets ever higher with Kyriakos Mitsotakis, the parliamentary spokesman of the main opposition New Democracy party, this morning accusing the prime minister of being unable to control his party.
Greece’s financial situation had got so bad, said Mitsotakis, that it had now reached a point where any deal with creditors at the EU and IMF “was better no deal.”Greece’s financial situation had got so bad, said Mitsotakis, that it had now reached a point where any deal with creditors at the EU and IMF “was better no deal.”
“That doesn’t mean that New Democracy won’t hesitate to look at the agreement and to exercise strong criticism if it is excessively heavy on taxes because Syriza does not want to pursue any other form of reform,” he told the radio station Parapolitika this morning.“That doesn’t mean that New Democracy won’t hesitate to look at the agreement and to exercise strong criticism if it is excessively heavy on taxes because Syriza does not want to pursue any other form of reform,” he told the radio station Parapolitika this morning.
“It has become clear that we are being governed by a party where 40% want us to leave the euro zone and to return to the drachma.“It has become clear that we are being governed by a party where 40% want us to leave the euro zone and to return to the drachma.
In the event that this is adopted we will live a huge national catastrophe and we will speak of the great national tragedy of the 21st century.”In the event that this is adopted we will live a huge national catastrophe and we will speak of the great national tragedy of the 21st century.”
11.55am BST11:5511.55am BST11:55
Heads-up: Greek finance minister Yanis Varoufakis has apparently pledged that Greece will meet its €305m repayment to the International Monetary Fund:Heads-up: Greek finance minister Yanis Varoufakis has apparently pledged that Greece will meet its €305m repayment to the International Monetary Fund:
11.27am BST11:2711.27am BST11:27
Optimism across Britain’s retail industry has hit its highest level since 1988, according to the Confederation of British Industry this morning.Optimism across Britain’s retail industry has hit its highest level since 1988, according to the Confederation of British Industry this morning.
The CBI’s latest survey showed that growth in retail sales volumes picked up strongly in the year to May -- perhaps suggesting that falling prices are encouraging shoppers to spend more.The CBI’s latest survey showed that growth in retail sales volumes picked up strongly in the year to May -- perhaps suggesting that falling prices are encouraging shoppers to spend more.
Expectations for next month are at their highest for 27 years. There’s only one black spot; DIY spending is down year-on-year.Expectations for next month are at their highest for 27 years. There’s only one black spot; DIY spending is down year-on-year.
Here’s some key points:Here’s some key points:
10.50am BST10:5010.50am BST10:50
European commissioner Pierre Moscovici hasn’t changed his tune this morning.European commissioner Pierre Moscovici hasn’t changed his tune this morning.
Moscovici has just warned that there is no Plan B for Greece, and that more effort is needed to agree a reform plan.Moscovici has just warned that there is no Plan B for Greece, and that more effort is needed to agree a reform plan.
10.43am BST10:4310.43am BST10:43
The crisis continues to bring out the best in Greece’s street artists.The crisis continues to bring out the best in Greece’s street artists.
10.27am BST10:2710.27am BST10:27
An (unnamed) German government official has told Reuters that Berlin still hopes Greece will meet its IMF repayment next week:An (unnamed) German government official has told Reuters that Berlin still hopes Greece will meet its IMF repayment next week:
10.09am BST10:0910.09am BST10:09
Another Greek government minister has floated the prospect of failing to repay the International Monetary Fund next month.Another Greek government minister has floated the prospect of failing to repay the International Monetary Fund next month.
Deputy Minister of Social Insurance Dimitris Stratoulis told Mega TV this morning that pensions and wages must come first:Deputy Minister of Social Insurance Dimitris Stratoulis told Mega TV this morning that pensions and wages must come first:
“If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, education”.“If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, education”.
Stratoulis also argued that missing an IMF repayment isn’t a ‘credit event’ - ie, a formal default. That’s via Enikos:Stratoulis also argued that missing an IMF repayment isn’t a ‘credit event’ - ie, a formal default. That’s via Enikos:
Failure to pay IMF is NOT a credit event, says Greek minister - http://t.co/wAhEvtIbM5Failure to pay IMF is NOT a credit event, says Greek minister - http://t.co/wAhEvtIbM5
Stratoulis is correct that failing to repay €305m to the IMF on 5 June probably would not count as an official default. And Greece would still have a month’s grace before the Fund gets really serious.Stratoulis is correct that failing to repay €305m to the IMF on 5 June probably would not count as an official default. And Greece would still have a month’s grace before the Fund gets really serious.
Bloomberg has pulled together a Q&A on this issue. Here’s a flavour:Bloomberg has pulled together a Q&A on this issue. Here’s a flavour:
Q: What will the IMF do?Q: What will the IMF do?
A: A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement.A: A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement.
Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration.Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration.
Important read from @nchrysoloras and @johneglover: FAQ on what happens if Greece doesn't pay the IMF http://t.co/bnyH4kqRF6Important read from @nchrysoloras and @johneglover: FAQ on what happens if Greece doesn't pay the IMF http://t.co/bnyH4kqRF6
9.49am BST09:499.49am BST09:49
Arnaud Masset, Market Analyst at online Swiss bank Swissquote also blamed Greece for the euro’s weakness today:Arnaud Masset, Market Analyst at online Swiss bank Swissquote also blamed Greece for the euro’s weakness today:
In Europe, mounting uncertainty about Greece’s next payment to the IMF on June 5 adds pressure on the single currency as Alexis Tsipras, Greece’s PM, declared that his government would accept a sustainable deal “but not a humiliating” agreement, threatening to default on €1.6bn loan repayment due to the IMF in June.In Europe, mounting uncertainty about Greece’s next payment to the IMF on June 5 adds pressure on the single currency as Alexis Tsipras, Greece’s PM, declared that his government would accept a sustainable deal “but not a humiliating” agreement, threatening to default on €1.6bn loan repayment due to the IMF in June.
As a result, the fall of the euro against the dollar accelerates.As a result, the fall of the euro against the dollar accelerates.
9.39am BST09:399.39am BST09:39
Kit Juckes, chief currency strategist at French bank Société Générale, sums up the situation this morning:Kit Juckes, chief currency strategist at French bank Société Générale, sums up the situation this morning:
The Greek government will need some form of deal in order to release further funds if it is to avoid missing payments to the IMF in June. Whether Greek PM Tsipras can negotiate a deal that is acceptable to enough MPs of his party isn’t clear and markets are once again, very edgy.The Greek government will need some form of deal in order to release further funds if it is to avoid missing payments to the IMF in June. Whether Greek PM Tsipras can negotiate a deal that is acceptable to enough MPs of his party isn’t clear and markets are once again, very edgy.
Across the Mediterranean, there have been heavy losses by Spain’s ruling Popular Party to anti-austerity parties in regional and local elections. Peripheral European government bond spreads are wider though not drastically, but the euro is much weaker.Across the Mediterranean, there have been heavy losses by Spain’s ruling Popular Party to anti-austerity parties in regional and local elections. Peripheral European government bond spreads are wider though not drastically, but the euro is much weaker.
And indeed, the euro is still bobbing below the $1.09 mark, a one-month low.And indeed, the euro is still bobbing below the $1.09 mark, a one-month low.
9.33am BST09:339.33am BST09:33
European stock markets are being buffeted by the Greek crisis, and the Spanish regional election results.European stock markets are being buffeted by the Greek crisis, and the Spanish regional election results.
The main indices are all in the red this morning, led by Madrid.The main indices are all in the red this morning, led by Madrid.
Spanish bank shares are still down, after anti-austerity candidates recorded strong gains at the expense of the governing PP party.Spanish bank shares are still down, after anti-austerity candidates recorded strong gains at the expense of the governing PP party.
Updated at 9.35am BSTUpdated at 9.35am BST
9.22am BST09:229.22am BST09:22
Greece’s two-year bonds are now at their weakest level in a month:Greece’s two-year bonds are now at their weakest level in a month:
Greek 2yr yields jump to almost 25% on more Greek noise. #ECB’s Hansson says agreement on #Greece ‘not in sight’ yet. pic.twitter.com/83UPNUBC3QGreek 2yr yields jump to almost 25% on more Greek noise. #ECB’s Hansson says agreement on #Greece ‘not in sight’ yet. pic.twitter.com/83UPNUBC3Q
(that’s Estonian central bank governor Ardo Hansson)(that’s Estonian central bank governor Ardo Hansson)
9.07am BST09:079.07am BST09:07
Greek bond weaken after Varoufakis blames creditorsGreek bond weaken after Varoufakis blames creditors
Greek bonds are falling this morning, pushing yields (the rate of return on the debt) higher into the danger zone.Greek bonds are falling this morning, pushing yields (the rate of return on the debt) higher into the danger zone.
Some in the City are blaming Greek finance minister Yanis Varoufakis, who yesterday pointed the finger at Greece’s creditors for the lack of progress.Some in the City are blaming Greek finance minister Yanis Varoufakis, who yesterday pointed the finger at Greece’s creditors for the lack of progress.
In a new blog post, Varoufakis chided lenders for insisting on even deeper cuts, on top of the last five years:In a new blog post, Varoufakis chided lenders for insisting on even deeper cuts, on top of the last five years:
The problem is simple: Greece’s creditors insist on even greater austerity for this year and beyond – an approach that would impede recovery, obstruct growth, worsen the debt-deflationary cycle, and, in the end, erode Greeks’ willingness and ability to see through the reform agenda that the country so desperately needs.The problem is simple: Greece’s creditors insist on even greater austerity for this year and beyond – an approach that would impede recovery, obstruct growth, worsen the debt-deflationary cycle, and, in the end, erode Greeks’ willingness and ability to see through the reform agenda that the country so desperately needs.
Our government cannot – and will not – accept a cure that has proven itself over five long years to be worse than the disease.Our government cannot – and will not – accept a cure that has proven itself over five long years to be worse than the disease.
He also produced this chart, showing how much damage has been caused to the Greek economy since its first austerity programme triggered a long recessionary, deflationary spiral.He also produced this chart, showing how much damage has been caused to the Greek economy since its first austerity programme triggered a long recessionary, deflationary spiral.
Varoufakis’s conclusion is basically that it’s their fault not our fault:Varoufakis’s conclusion is basically that it’s their fault not our fault:
Fair-minded observers of the four-month-long negotiations between Greece and its creditors cannot avoid a simple conclusion: The major sticking point, the only deal-breaker, is the creditors’ insistence on even more austerity, even at the expense of the reform agenda that our government is eager to pursue.Fair-minded observers of the four-month-long negotiations between Greece and its creditors cannot avoid a simple conclusion: The major sticking point, the only deal-breaker, is the creditors’ insistence on even more austerity, even at the expense of the reform agenda that our government is eager to pursue.
More here: Austerity Is the Only Deal-BreakerMore here: Austerity Is the Only Deal-Breaker
In response, Greek two-year bond yields have jumped by 196 basis points, or almost 2%, to 24.94%, showing a high risk of default.In response, Greek two-year bond yields have jumped by 196 basis points, or almost 2%, to 24.94%, showing a high risk of default.
Ten-year bonds are weakening too:Ten-year bonds are weakening too:
Greece 10 years up 46bp this morning to 11.83% - the mkt hated Varoufakis's article and the big split in SYRIZA adding to concerns.Greece 10 years up 46bp this morning to 11.83% - the mkt hated Varoufakis's article and the big split in SYRIZA adding to concerns.
8.42am BST08:428.42am BST08:42
Traders are also blaming Klaus Regling, the head of the European Stability Mechanism, for today’s euro selloff.Traders are also blaming Klaus Regling, the head of the European Stability Mechanism, for today’s euro selloff.
Regling has told Germany’s Bild newspaper that Greece risks insolvency if it doesn’t reach a deal as a matter of urgency.Regling has told Germany’s Bild newspaper that Greece risks insolvency if it doesn’t reach a deal as a matter of urgency.
He said:He said:
“There is little time left... That’s why we’re working day and night for an agreement.“There is little time left... That’s why we’re working day and night for an agreement.
Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that,”Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that,”
Those “ominous comments” have sent a shiver through trading floors, says Ilya Spivak, currency strategist at DailyFX.Those “ominous comments” have sent a shiver through trading floors, says Ilya Spivak, currency strategist at DailyFX.
Updated at 9.30am BSTUpdated at 9.30am BST
8.36am BST08:368.36am BST08:36
Newsflash from Madrid; Spanish bank shares are falling, as last weekend’s regional election results ripple through the markets.Newsflash from Madrid; Spanish bank shares are falling, as last weekend’s regional election results ripple through the markets.
That mirrors the fall in Spanish bonds this morning.That mirrors the fall in Spanish bonds this morning.
Analysts say that the success of the anti-austerity Podemos party have thrown prime minister Rajoy’s re-election strategy into doubt.Analysts say that the success of the anti-austerity Podemos party have thrown prime minister Rajoy’s re-election strategy into doubt.
Reuters explains:Reuters explains:
At a local level, the PP faces a new era of coalition and compromise for which it is ill-prepared.At a local level, the PP faces a new era of coalition and compromise for which it is ill-prepared.
Rajoy - whose party must form pacts with some of the new groups if it is to retain power in a number of regions, including Madrid - has campaigned hard against them. Earlier this month he said they were “gangs” and a threat to Spain’s political and economic stability.Rajoy - whose party must form pacts with some of the new groups if it is to retain power in a number of regions, including Madrid - has campaigned hard against them. Earlier this month he said they were “gangs” and a threat to Spain’s political and economic stability.
More here: Rajoy’s Spanish re-election plan in doubt after local batteringMore here: Rajoy’s Spanish re-election plan in doubt after local battering
8.30am BST08:308.30am BST08:30
The euro is continuing to lose ground, and is now down 0.85 of a cent against the US dollar at $1.089.The euro is continuing to lose ground, and is now down 0.85 of a cent against the US dollar at $1.089.
It’s not just about Greece, though. The dollar is romping ahead against most currencies this morning, on speculation that US interest rates will rise soon.It’s not just about Greece, though. The dollar is romping ahead against most currencies this morning, on speculation that US interest rates will rise soon.
Federal Reserve chair Janet Yellen indicated last Friday that the Fed would act, if the US economy kept improving.Federal Reserve chair Janet Yellen indicated last Friday that the Fed would act, if the US economy kept improving.
8.21am BST08:218.21am BST08:21
Spanish bond yields rise after electionSpanish bond yields rise after election
Spanish government debt is falling in value too, after anti-austerity activists secured a stunning victory in last weekend’s regional elections.Spanish government debt is falling in value too, after anti-austerity activists secured a stunning victory in last weekend’s regional elections.
A backlash against Spain’s established parties saw an anti-poverty campaigner elected as mayor of Barcelona. In Madrid, left-leaning candidates came second, close behind the ruling PP party.A backlash against Spain’s established parties saw an anti-poverty campaigner elected as mayor of Barcelona. In Madrid, left-leaning candidates came second, close behind the ruling PP party.
While the PP still came first in nine regions, it didn’t win a single majority -- meaning it could lose power if rivals form local alliances.While the PP still came first in nine regions, it didn’t win a single majority -- meaning it could lose power if rivals form local alliances.
Related: Spain's indignados could rule Barcelona and Madrid after local election successRelated: Spain's indignados could rule Barcelona and Madrid after local election success
The results suggest Spain’s traditional two-party system is being blown apart, as citizens rebel against the policies that drove unemployment to record highs.The results suggest Spain’s traditional two-party system is being blown apart, as citizens rebel against the policies that drove unemployment to record highs.
Spain will hold a general election later this year; the success of the anti-austerity Podemos and centre-right Ciudadanos parties suggest there might not be a clear winner.Spain will hold a general election later this year; the success of the anti-austerity Podemos and centre-right Ciudadanos parties suggest there might not be a clear winner.
That has driven the yield, or interest rate, on Spanish 10-year bonds up by almost 9 basis points today to 1.862%, from 1.77% last night.That has driven the yield, or interest rate, on Spanish 10-year bonds up by almost 9 basis points today to 1.862%, from 1.77% last night.
7.58am BST07:587.58am BST07:58
The euro is losing ground against almost every major currency today:The euro is losing ground against almost every major currency today:
EURUSD 1.0909. pic.twitter.com/cOTbJ5PYChEURUSD 1.0909. pic.twitter.com/cOTbJ5PYCh
7.57am BST07:577.57am BST07:57
Euro hits one-month lowEuro hits one-month low
Fears over the Greek bailout have pushed the euro down to a one-month low this morning.Fears over the Greek bailout have pushed the euro down to a one-month low this morning.
The single currency has fallen by over half a cent against the US dollar to $1.0909, its lowest point since late April.The single currency has fallen by over half a cent against the US dollar to $1.0909, its lowest point since late April.
Traders are responding to warnings that Greece may fail to meet the €1.6bn it owes the International Monetary Fund in June.Traders are responding to warnings that Greece may fail to meet the €1.6bn it owes the International Monetary Fund in June.
As Barclays warns this morning:As Barclays warns this morning:
“The Greek political saga will remain in the spotlight as the deadline for payments to the IMF approaches”,“The Greek political saga will remain in the spotlight as the deadline for payments to the IMF approaches”,
“A light data calendar and continued political uncertainty in Greece should continue to weigh on the euro.”“A light data calendar and continued political uncertainty in Greece should continue to weigh on the euro.”
Over the weekend, two Greek ministers have warned that the IMF’s repayments are in doubt.Over the weekend, two Greek ministers have warned that the IMF’s repayments are in doubt.
On Sunday, interior minister Nikos Voutsis declared that “This money will not be given and is not there to be given”, arguing that pensions and wages must come first.On Sunday, interior minister Nikos Voutsis declared that “This money will not be given and is not there to be given”, arguing that pensions and wages must come first.
Related: Greece warns it is set to default on debt repayment loansRelated: Greece warns it is set to default on debt repayment loans
And energy minister Panagiotis Lafazanis also hit out at “austerity fanatics”, saying Greece will not be blackmailed.And energy minister Panagiotis Lafazanis also hit out at “austerity fanatics”, saying Greece will not be blackmailed.
Lafazanis declared:Lafazanis declared:
“It would not be a catastrophe to exit the euro, (nor) a terrorist act not to pay the next instalment to the IMF.”“It would not be a catastrophe to exit the euro, (nor) a terrorist act not to pay the next instalment to the IMF.”
That sort of talk will certainly spook the City....That sort of talk will certainly spook the City....
Updated at 8.00am BSTUpdated at 8.00am BST
7.46am BST07:467.46am BST07:46
Introduction: Greece returns to talks with its creditorsIntroduction: Greece returns to talks with its creditors
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After a bank holiday break, Greece’s tortuous bailout negotiations return to centre stage today.After a bank holiday break, Greece’s tortuous bailout negotiations return to centre stage today.
Greece’s officials will sit down with their creditors in Brussels, for another crack at closing the gaps between the two sides before the bailout extension expires in just five weeks time.Greece’s officials will sit down with their creditors in Brussels, for another crack at closing the gaps between the two sides before the bailout extension expires in just five weeks time.
The talks are expected to focus on the now-familiar red lines – VAT rates, pension reform, labour deregulation and Greece’s primary surplus targets.The talks are expected to focus on the now-familiar red lines – VAT rates, pension reform, labour deregulation and Greece’s primary surplus targets.
The steadfast lack of progress is fuelling concerns that Greece will fail to meet its looming debt repayments. Last night, prime minister Alexis Tsipras called an emergency cabinet meeting to discuss the crisis/The steadfast lack of progress is fuelling concerns that Greece will fail to meet its looming debt repayments. Last night, prime minister Alexis Tsipras called an emergency cabinet meeting to discuss the crisis/
As Athens correspondent Helena Smith reports:As Athens correspondent Helena Smith reports:
Amid mounting fears of financial collapse, Tsipras instructed officials to act speedily as his government sought to defuse tensions saying it would do its best to honour its debts – even if it failed to reveal how, exactly, it would find the money to pay €1.6bn in loans to the International Monetary Fund next month.Amid mounting fears of financial collapse, Tsipras instructed officials to act speedily as his government sought to defuse tensions saying it would do its best to honour its debts – even if it failed to reveal how, exactly, it would find the money to pay €1.6bn in loans to the International Monetary Fund next month.
“We are very close to a deal,” the finance minister Yanis Varoufakis told reporters. “There are many different Germans, just as there are many different Greeks,” he said responding to reports that Berlin would not be prepared to retreat in what has become an all-out tug of war between the two governments.“We are very close to a deal,” the finance minister Yanis Varoufakis told reporters. “There are many different Germans, just as there are many different Greeks,” he said responding to reports that Berlin would not be prepared to retreat in what has become an all-out tug of war between the two governments.
Related: Greek PM convenes emergency meeting of his bailout negotiation teamRelated: Greek PM convenes emergency meeting of his bailout negotiation team
The ongoing crisis is expected to weigh on Europe’s stock markets; yesterday the Athens exchange fell by 3%.The ongoing crisis is expected to weigh on Europe’s stock markets; yesterday the Athens exchange fell by 3%.
Our European opening calls: $FTSE 7037 up 5 $DAX 11782 down 33 $CAC 5101 down 16 $IBEX 11259 down 64 $MIB 23269 down 17Our European opening calls: $FTSE 7037 up 5 $DAX 11782 down 33 $CAC 5101 down 16 $IBEX 11259 down 64 $MIB 23269 down 17
The agenda....The agenda....
There’s no European economic data to look forward to, alas, but we do get four surveys from America:There’s no European economic data to look forward to, alas, but we do get four surveys from America:
And in London, former UBS and Citigroup trader Tom Hayes will appear at Southwark crown court, accused of conspiring to rig the Libor benchmark interest rate. Hayes will be the first individual to face charges of alleged Libor rigging.And in London, former UBS and Citigroup trader Tom Hayes will appear at Southwark crown court, accused of conspiring to rig the Libor benchmark interest rate. Hayes will be the first individual to face charges of alleged Libor rigging.
Related: First Libor defendant faces trial in LondonRelated: First Libor defendant faces trial in London
I’ll be tracking all the main events through the day...I’ll be tracking all the main events through the day...
Updated at 8.15am BSTUpdated at 8.15am BST