Europe set for busy week as Greek debt deal yet again worries investors

US, European and Asian markets are all set to be dominated by the same old stories as we move into a new trading week. Overnight Asian equity markets have posted yet more gains, and the US dollar has retreated further as global markets continue to focus on the Federal Reserve and possibility of a rate hike in the US earlier than expected. Three Fed member speak today after removing the guidance last week, so investors will be listening for any hints of which month we could well see this now widely expected movement in rates.

The Fed is not the only dominating factor this week as discussions over a deal for Greek debt continue to rumble on. There are actually growing concerns that the Greeks will run out of money in the coming days, and that the current shortfall in funds is around 3 billion EUR. However if history of this enormous mess is anything to go by then what we could well see is just a further extension to the deadline. Most of us do expect a deal to be struck within the allotted time, however the stakes are too high for global markets to let the Greek government pass the deadline without a deal being struck.

This week is yet again a busy one for economic data with important numbers out throughout the week. However Monday does start rather quietly first thing, but later in the session a speech from Mario Draghi will of course grab the markets attention. A likely meeting between German chancellor Angela Merkel and Greek prime minister Alexis Tsipras will be high on the agenda if questions are taken by Mr Draghi. He will also soon start to be quizzed on just how long it will take for the QE program to start working its magic on the EZ economy. Since the introduction of the stimulus package we have seen strong moves across Europe on the major equity markets with the Dax and the FTSE both trading through significant psychological barriers. With a speech from Mr Draghi and a whole host of inflation data to released during the rest of the week, anything that shows signs of improvement will be the sweet spot for European equities.

However the feeling around the major indices is some what of a mixed one for traders. Our community currently shows that traders on both the German Dax and FTSE100 are unsure as to the next directional move, with both of the sitting at 47% - 53% short vs long positions. There is a general feeling that equity markets have moved a little too far, too quickly and that a correction, especially in the German DAX could be just around the corner. If anything is likely to burst the European equity market bubble it would definitely be a negative outcome in Greece, as yet again the Greeks hold the power of Financial market stability in their hands.

Ahead of the open we expect to see the FTSE100 open higher by 17 points with the German DAX higher by 2 points.