Daily Market Report - 17/03/2015

German Chancellor Angela Merkel yesterday invited Greek Prime Minister Alexis Tsipras to Berlin for talks next week as tensions grew as Germany's finance minister accused the new Athens government of destroying all trust in Greece. The hard-line comments laid bear the fraying relations between the two countries, with Tsipras struggling to find any EU allies in his push to end austerity in Greece and renegotiate the terms of a bailout programme.

Greece also announced yesterday a large revision of its 2014 budget, saying it came in at just 0.3 percent of output compared with a previous estimate of 1.5 percent. The unexpectedly low figure means Greece looks set to miss a key target of its bailout programme. Greece also successfully repaid 580m it owed to the IMF yesterday, but needs to pay another 250m to the IMF this Friday.

The European Union took a hard stance with Greece yesterday.  The European Union's financial affairs chief Pierre Moscovici said on Monday that Greece needed to repay its debt and could not expect its loans to be written off.  According to Moscovici the contagion risks to the rest of the euro zone from the Greek crisis were much lower than they were two years ago but he stressed that countries still needed to press on with reforms.

ECB President Mario Draghi spoke yesterday in an upbeat tone saying the Eurozone economy is steadily recovering. He cites the decision to begin printing money to buy sovereign bonds, lower oil prices and structural reforms in Eurozone economies were helping to support growth. He also said that confidence among firms and consumers is rising with several countries growth forecasts being revised upwards.

Key Announcements
EUR - 10:00 - Consumer Price Index YoY (Feb) expected to increase to -0.3% from -0.6%
EUR - 10:00 - German ZEW Survey - Economic Sentiment (Mar) expected to rise to 58.2 from 53
EUR - 10:00 EUR  ZEW Survey - Economic Sentiment (Mar) expected to rise to 58.2 from 52.7

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