Deteriorating Greek situation pushed sentiment lower across Europe. Communications from Greek government and Eurozone creditors remain far off, so does the negotiation.
- Greek had to tap emergency account funds in IMF to payback €750 million to IMF on May 12th, suggesting that the country might be very close to bankruptcy.
- Greek Prime Minister Alexis Tsiparas has suggested that Greece will likely to default if Euro zone creditors failed to release the remaining € 7.2 billion trance of bailout program by end of May and remain hopeful that they will be reaching an agreement with creditors by the time.
- However, the gap still remains large according to Euro zone officials with Greek government resisting calls for pension and labor market reforms.
Today’s Zew economic survey showed that sentiment across Euro zone dropped as Greek drama continue to remain in limelight.
- German economic sentiment dropped to 41.9 in April from prior 53, largest drop since European central Bank (ECB) announced bond purchase program.
- Zew survey current situation dropped to 65.7 from prior 70.2.
- Economic sentiment for Euro zone dropped to 61.2 from prior 64.8.
Falling sentiment would hurt European assets including Euro if data deteriorates further. Euro is currenly trading at 1.12 against dollar, down -1.12% today.
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