The “Story That Never Dies” may have a date with the executioner. It was announced yesterday that a meeting this upcoming Monday (Feb 6^th) is the new deadline for the parties to agree on all things Greek. Firstly, the size of the haircut that private investors must take on their holdings alongside what the ECB will do with its holdings. Secondly, the size of another bailout, which is rumoured to be around the EUR130bn mark and finally, further austerity measures from the Greek government. Surely, there must be a circle of hell somewhere down there where punishment is purely talking about the Greek situation and the false hope of these meetings.

Needless to say we are not expectant of a resolution on Monday; they can barely agree one matter in one day, let alone three in one day.

Announcements that we will also file on the shelf that reads “I’ll believe it when I see it” was chatter out of China yesterday. Chancellor Merkel is currently in China trying to solicit some money from her hosts to help with the Eurozone crisis and Premier Wen yesterday stated that China is considering increasing its contribution to the two European bailout funds. We haven’t had the “China as saviour” rumour  for a while so it was good of it to check in but we believe this is as far as it will go in the short term. Considering increasing your contribution and actually doing it are 2 very different things and we believe the Chinese do not consider the situation warrants an investment yet.

Euro rallied on both announcements but has not been able to break out of the ranges that it finds itself in. It’s unlikely to as well, pre-Non Farm Payrolls this afternoon.

The key figures this morning will be the services numbers from Europe and the UK. The US’s figure is this afternoon. We are below consensus in our estimate for UK services PMI (52.8 vs 53.3) as we believe the drop off in consumer spending between December and now has been slightly more than most expect. This should see cable come off its recent highs while GBPEUR may drift back towards the 1.20 figure. A positive beat could see GBPUSD push 1.59 although moves will be slight before the US jobs measure.

Payrolls are due at 13.30 and 140k is the expected figure with the unemployment rate forecast to remain at 8.5%. We think that we see a figure slightly below 140k and both GBPUSD and EURUSD will finish the day lower than where they are currently trading.

Have a great weekend

P.S. 6 Nations predictions are wins for France, England and Ireland.

Latest exchange rates at time of writing