While sovereign bond markets in Europe remain relatively calm in the face of a potential “Grexit” scenario, equity markets across Europe have continued to remain under pressure posting new multi month lows in the process, with Italian and Spanish markets posting the sharpest falls. The mood is unlikely to be enhanced this morning after the ECB left its ELA program to Greek banks unchanged, but raised the haircut on the collateral to a higher level as a result of the weekend Greek “No” vote. This move is likely to increase criticism that the central bank is getting involved in exerting political pressure and acting beyond its mandate of price stability, and as lender of last resort, which any credible central bank should do as a matter of course. All the ECB has done is make it more likely that Greek banks will run out of money in a matter of days. Furthermore it remains highly unlikely that the Greek government will be able to make it to the next key payment deadline of 20th July when a €3.5bn bond to the ECB becomes repayable. While the departure of the polarising Greek finance minister Yanis Varoufakis is likely to mean that relations between the creditors and the Greek government are likely to improve, in reality the move changes nothing, particularly since attitudes in some parts of Europe appear to have hardened. The players may have changed but the problems remain the same and while European finance ministers have agreed to meet today to consider some new Greek proposals, the likelihood is that they are unlikely to be any more acceptable now than they would have been last week, particularly given that debt relief is likely to be one of the key demands from the Greece side. This would suggest that any new agreement remains unlikely which means that Greece may well be forced to issue its own currency in a matter of days. On the economic data front we have the latest UK industrial and manufacturing production data for May which is likely to paint a rather mixed picture for the economy given the slowdowns seen in the recent PMI data. There is optimism that after a mixed outlook in April that a rebound in North Sea oil production seen in the recent NIESR GDP numbers could well be reflected in the May numbers this morning, given that April saw a 0.4% rise in industrial production. Expectations are for a decline of 0.2%. The pharmaceutical sector was one of the key reasons we saw a 0.4% decline in the manufacturing sector in April, which was blamed on the recent rise in the pound at a time when we are seeing a bit of a demand slowdown in the global economy. The US economy is also continuing to generate mixed signals in the wake of last week’s rather disappointing payrolls report. Granted the headline number was a respectable 223k, but the internals were disappointing. A downward revision of 48k to the previous two months and the lowest participation rate since 1977, suggests there is probably significantly more slack in the US labour market, than we think. A lower than expected average hourly earnings number is likely to keep inflation pressures while today's May trade balance data is expected to show a wider $42.75bn deficit, from April’s $40.9bn figure. EURUSD – the 1.0960 level appears to be acting as a level of support in the near term, with only a break lower targeting a move towards 1.0600. We need to get back above the 100 day MA at 1.1040 to stabilise to suggest a move back towards 1.1170 and 1.1400. GBPUSD – currently holding above trend line support at 1.5545 from the lows at 1.4565. The 50 day MA at 1.5520 should also help support, with a break lower targeting 1.5400. We need to get back through 1.5820 to stabilise. EURGBP – finding some support at the 0.7060 level the key day reversal last week does suggest scope for further downside could be limited. Only a break below 0.7000 could well open up the 0.6920, the November 2007 lows. Resistance comes in at 0.7120 and 0.7160. USDJPY – the support at the 121.70/80 area remains a key level, a break of which could see a move towards 120.85. There is trend line resistance at 123.40, which comes in from the 125.85 highs. We need to push above 124.50 to suggest a return towards the 125.85 highs. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.