Varoufakis: Athens still faces demands from creditors it can’t agree toGerman chancellor Angela Merkel says ‘time is of the essence’Greek labour minister says creditors asking for ‘suicide of an entire people’ 8.59am BST Over in Athens this morning the mood appears to have shifted yet again, reports our correspondent Helena Smith.Last night, it was optimism that ultimately reigned with senior officials in Greece’s governing Syriza party expressing the hope that a cash-for-reform deal was ultimately in sight.There is a detectable shift in stance. Under pressure lenders have retreated on several issues.On the basis of what things look like today the possibilities of an agreement are slim. Every time a solution is almost found and there is convergence, they come and say “bring us a few more pensioners to execute.” What they are asking right now is tantamount to the suicide of an entire people. 8.50am BST More thoughts on Greece. Angus Campbell, senior analyst at FxPro, says:Another day passes with no deal on Greece and investors are likely to want to position themselves for negotiations to go on into the weekend by reducing exposure to risk assets. Indices are a little softer on the open and the euro is offered as we see yet another classic situation when it comes to the eurozone with things going down to the wire. Investors however remain optimistic that a deal will be struck ahead of next week’s IMF payment deadline throwing Greece yet another lifeline.If the expected deal does come over the weekend then investors will not be able to react until Monday and there could be disappointment if Greece is afforded just the extension to its existing bailout which will only fund the country through the summer. The political will that has so far kept the eurozone intact is being tested more than it has ever been before and is likely to be further. It’s just a question of whether politicians and in particular Greece’s creditors have the staying power. 8.48am BST Whose round is it in the last chance saloon? ask Mike van Dulken and Augustin Eden at Accendo Markets.While we might berate Greece for stringing things out, why wouldn’t it do so until the last minute? Again. It knows exactly what the other side wants and can simply agree to just in the nick of time. Again. Until then, you never know what the purse-string-holders might concede, improving the final deal. The only risk is whether Greek depositors are prepared to hold out too. If they exit en masse they could force Tsipras’ and Syriza’s hand in terms of potential financial collapse. 8.43am BST European stock markets are down this morning, as expected. The Athens market has lost 0.9% in early trading. The FTSE 100 index in London has lost more than 40 points, or 0.6%, to 6767.40. The Dax in Frankfurt has slid 0.5% to 11416.55, and the CAC 40 in Paris is 0.7% lower at 5007.61. The Ibex in Madrid has fallen 0.7% to 11250.30 while the FTSE MiB in Milan is down 0.5% at 23,534.17.Craig Erlam, senior market analyst at Canadian foreign exchange firm OANDA, said:By the time the markets reopen next week, Greece may have either secured a deal or accepted default to the IMF. With all this in mind, I expect to see significant risk aversion this morning with investors preparing for fireworks over the weekend. 8.35am BST Yanis Varoufakis, the Greek finance minister, claimed this morning that his country had done everything it could to accommodate the “strange demands” made by its creditors, and was determined to remain in the eurozone. However, Athens is still facing demands from its creditors that it cannot agree to, he said in an interview with Irish national radio RTE. 8.31am BST European Commission president Jean-Claude Juncker has admitted that long hours of negotiations on Greece could be counter-productive.We cannot take the right decisions when we are tired. 8.28am BST Bernard Aw, market strategist at trading firm IG, said the “correction” in the Shanghai stock market is healthy in the long run, and China’s central bank wants the market to be more stable.It is probably not a bad idea to repeat my view that China’s leaders still view a strong capital market as beneficial for the Chinese economy, more importantly, a stable bull market is desired. 8.18am BST In Asia, stock markets sold off after another black Friday in China. The Shanghai stock market tumbled nearly 8%, dragging down other markets. Hong Kong’s Hang Seng lost almost 2% while Japan’s Nikkei was more resilient, dipping 0.3%.The Shanghai Composite has surged 124% over the past year and analysts believe its 935 day bull run has peaked, amid rising uncertainty about whether the government will continue to ease policy to boost the economy.This is probably not a dip to buy. In fact, we think the balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and the ChiNext has now taken place. 7.59am BST Meanwhile, Jasper Lawler, market analyst at CMC Markets UK, says:German chancellor Angela Merkel has said Saturday’s Eurogroup meeting would be of “decisive importance.” Perhaps a wider concern for markets is that each day the institutions lose more credibility when these arbitrary “final” deadlines gets missed. It doesn’t look too hopeful that an agreement will be reached on Saturday. Pensions are still a sticking point that neither side wishes to give into. That said, nobody wants to be left holding the smoking gun of Greece’s default and exit from the euro. It seems likely that another arbitrary extension date will emerge before June 30, when Greece’s current bailout runs out. 7.57am BST Good morning and welcome back to our coverage of the eurozone (Greece) debt crisis and other economic developments. Following Thursday’s 24-hour negotiating marathon, European politicians will be working frantically on a deal between Greece and its international creditors, before talks between eurozone finance ministers resume on Saturday. Every member of the European Council [EU leaders] strongly supported that every effort has to be made to bring about a solution.JPM on #Greece: Without a deal by Sunday evening, the Greek Banks will not open on Monday, and capital controls will be introduced. Continue reading...
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