As NAB strategists note, "the IMF wants official sector holders of Greek debt (mostly the ECB) to take a haircut on their holdings", but neither the ECB nor Eurozone countries are happy with that, as "they would then be obliged to provide more money to recapitalise the Central Bank" NAB comments. While the sum at stake in not huge (€10-15bn), "it’s hard to see anyone being able to emerge from the discussions with a positive story to tell or a victory to claim" NAB adds.
"Once again, it will be a case of watching the newswires today. If a Greek deal is delayed, we suspect the 1.2875 support level on EUR/USD will be tested. If a deal is confirmed, a bounce into the 1.3000/20 region looks likely" NAB concludes.