Greece takes downgrade By S&P

Good Morning,

- Tsipras government rejected last-minute Juncker proposal.

- Greece takes downgrade By S&P – Sees 50% exit of Euro

- Greece Will Default on IMF Loan; Referendum Holds Fate on Eurozone Exit

- After gapping 153 pips lower to begin the trading week, $EURUSD climbed 2% on Monday erasing losses. The pair is little changed from Friday.

- $EUR, $NZD, and $AUD are expected to be the most active majors vs $USD with 1W implied volatility at 17.73, 14.70, and 14.27 respectively.

- Fitch Ratings downgrades Greek banks to 'Restricted Default' (RD) with institution of capital controls. NBG, Piraeus, Alpha,Eurobank Ergasias

- German Econ: Retail Sales 0.5% m/m and -0.4% y/y in May vs 0.0% m/m and 2.8% y/y expected vs 1.3% m/m and 1.1% y/y in April.

- BNP Paribas on EUR/USD: It is now almost certain that Greece will miss the EUR 1.5bn payment it owes the IMF today and although this is not technically a default, rather a payment in arrears, it will add to the negative news flow, notes BNP Paribas. "The EUR’s price action suggests pressure to cover EUR-funded positions continues to outweigh negative sentiment associated with Greek exit risks. However, going forward we expect the EUR to be increasingly vulnerable to Greece concerns, with the ECB likely to signal it is willing to accelerate asset purchases if peripheral yields continue to show signs of contagion," BNPP argues. "We continue to view success at containing or reducing Greece stress as likely to be the most negative scenario for the EUR as the resulting recovery in risk sentiment would be associated with a resumption of EUR investor outflows and rebuilding of EUR-funded risk positions," BNPP adds.

- How will FX companies avoid a second “Black Thursday” if Greece exits EU? Industry executives speak to LeapRate regarding a close eye is being kept on margin utilization and the requirement for clients to be sufficiently funded in case of extreme volatility caused by an exit from the Eurozone and subsequent default by Greece. Europe’s economy has been an epicenter of volatility over recent months, with national debt to GDP ratios among mainland European nations at very high levels, and, more significantly, Greece’s imminent insolvency and potential inability or unwillingness to pay its large debt to the European Central Bank. Switzerland shocked the entire global financial services industry in January this year....

- EU chief 'betrayed' by Greece...The European Commission chief, Jean-Claude Juncker, has said he feels "betrayed" by the "egotism" showed by Greece in the failed debt talks. He told a news conference that Greek proposals were "delayed" or "deliberately altered" and the Greek people "should be told the truth", but the door was still open to talks.

- U.S. stock suffer worst drop of 2015 on Greek default fears.Greece only makes up 0.3% of the global economy, but it's causing a global stock market sell-off. U.S. stocks suffered their worst plunge so far in 2015 on Monday. Investors don't like uncertainty, and Greece is the poster child for "up in the air." The Dow shed 350 points, nearly a 2% drop. The S&P 500 fell over 2%, and the tech-heavy Nasdaq lost 2.4%. Asian and European markets were even deeper in the red. Germany's main DAX index ended the day down 3.5%.

- In a note to clients today, Bank of America Merrill Lynch outlines its latest comprehensive outlook for EUR/USD including its themes, forecasts, and risks. Themes: FED, ECB, Greece: "The Greek Referendum will drive headlines for the near-term. We believe that divergence of monetary policies is a more powerful EUR driver than Greek risks. In this context, the timing of the first Fed rate hike (September is our call) and the ECB’s tone (the market misread the ECB’s message to get used to volatility) are more important for the euro than Greek headlines.

- Today news: CAD GDP, EZ CPI, USD Consumer Confidence, German Unemployment Rate

Have a nice Day !