Afternoon analysis 03.07.2015

The market focus shifted to Greece before the bailout referendum. The IMF supported Tsipras's view on debt relief. The euro and the zloty are waiting for the referendum outcome.

The Friday's session was very calm. Before voting on Sunday the investors were reluctant to make significant trades as the uncertainty was higher than usual.

The latest polls cited by information agencies gave no clear answer whether the Greeks will support the austerity program. The study published by the Bloomberg agency showed that the support was equally divided (more on the issue in our morning commentary). However, the poll cited by the Reuters agency showed that the majority of people is going to support the austerity. 44.8 percent of the Greeks is willing to vote for and 43.4 percent against.

Although there was not much time left before the voting, the situation may change.

The International Monetary Fund published a study that argues Greece need additional 60 billion euro over the coming three years and a debt reduction is necessary to stabilize the economy. Moreover, the Washington-based institution is not going to support any bailout plan that will not include a debt relief.

The Greek Prime Minister Alexis Tsipras praised the IMF report. In a televised appeal to the nation he said that a similar offer has not been presented during the negotiations. Tsipras urged the Greeks to vote against the austerity plan.

The Greek Minister of Finance, Yanis Varoufakis said the talks with the European Central Bank and the European Commission were continued. He said, that if the Greeks accept the reform plan, the government will agree to sign it. In the opposite situation, the Greek government will resume negotiations.

The volatility in the markets was limited not only due to the Greek stand-off. The US markets were closed because the Independence Day holiday.

The zloty was calm

The zloty recorded some losses today. However, the volatility was limited similarly to the other markets. The European markets were in the red, but the declines were limited. The risk aversion was reflected by the Swiss franc that increased above the level of 4 PLN.

A positive outcome of the Sunday's referendum will support the risk taking. As a result, the zloty would be strengthened.

However, if the Greeks say not to the austerity, the markets will react negatively. In that case, the zloty will drop. Moreover, it is not clear, what actions will be undertaken by Athens and the international creditors. Although the talks will be resumed, the likelihood of an imminent deal will be reduced. The Tsipras's government will increase its demands as it will be backed by the society. However, it would not automatically result in a more conciliatory stance of the country's creditors. It a similar scenario, the risk aversion period will be extended, and the zloty may post more losses.