Fireworks Likely

News from Europe has increased with drama regarding Greece. European leaders have made it clear that they are not happy with the prospects for a Greek referendum and have suspended the second payout of a promised bailout package until further clarity arrives. Uncertainty is the one certainty regarding Greece at this point and the EUR continues to meet headwinds because of this. The EUR is trading near lows and the GBP and AUD are following in the Single Currency’s shadow. Clarity is in short supply regarding the path that Greece and the E.U will follow, except for a No Confidence vote that is scheduled for the Greek parliament on Friday.  If all of that weren’t enough, the E.U. has made it clear that if Greece votes against the bailout package via the referendum that its future in the Single Currency will actually come under scrutiny by E.U. nations.

Today adding to the saga is the ECB which will have Mario Draghi at the helm for the first time for the European Central Bank. It is likely that Draghi will try to make this initial press conference as mundane as humanly possible. Investors are begging for stability and Draghi probably understands this well. The ECB will be asked about bond purchases and prospects for growth in the E.U., but it will desperately try to stay away from the political questions which are beginning to filter into this economic puzzle via the Greek referendum storm. Investors will be keen to see if it is a ‘quiet’ press conference. Europe continues to face the prospects of weak growth and the core problems within the financial institutions. While Greece is under everyone’s microscope, the problems within Italy and other nations have not gone away. The EUR is trading near short term lows and has not shown much in the way of capability to bounce back as of yet. These next two days of trading going into the weekend pose substantial risks for the EUR.

On the other side of the Atlantic, Wall Street actually turned in gains on Wednesday after swift declines on Monday and Tuesday. The question is if this was an attempt at bottom feeding, cashing out, or a sign of a possible reversal such as the one that occurred in October. The FOMC Statement in the U.S. last night showed that the Fed still sees stiff challenges ahead, but was encouraged by better growth. The Fed essentially held its ground. The ISM Non Manufacturing PMI numbers will be released today, along with the weekly Unemployment Claims. Tomorrow the Non Farm Employment Change results will come into immediate focus. Even as the States has gone from bad economic data to merely lackluster readings, investors are still hard pressed to be overly positive and this has found its expression via the equity markets. The USD has found backers as risk adverse trading has risen and this may continue going into the weekend.

Commodity prices have bounced around the past few sessions with so many questions regarding the global economic outlook. Crude Oil has faced some headwinds the past two sessions and if troubling news continues from the E.U. and is underscored by weaker economic data from China, Crude Oil may find it tough to gain in any noteworthy manner. Gold is around 1732.00 USD as of this morning and continues to consolidate as dark skies surround the EUR. Risk sentiment is certainly in question going into today’s trading. The Greek saga combined with the ECB meeting today and tomorrow’s jobless numbers from the States could lead to fireworks.