EUR: Greece to remain the focus

Greek political developments will remain in focus this week, with the Eurogroup and EU finance ministers meetings on Thursday and Friday, respectively. 

However, it is important to note that these meetings will follow a technical briefing to the press on Greece (Tuesday) by the Euro Working Group and the Economic and Financial Committee that should provide an important indication of progress. 

A failure to come to agreement would likely make it difficult to have a smooth resolution before the end of June, when the programme expires. Another extension of the programme is possible, although not straight orward as it would require the approval of some national parliaments, including the Bundestag in data calendar is particularly light. 

"We and consensus forecast May euro area final headline and core HICP inflation (Wednesday) to be confirmed at 0.3% y/y and 0.9% y/y, respectively. Also, the ECB will carry out its fourth TLTRO operation on Thursday" says Barclays.

Following the much-higher-than expected take-up at the March TLTRO (c.€98bn), participation in next week's TLTRO will be important, especially amid the sensitive bond and currency markets in Europe. 

"Our interest rate strategists project take-up of around €80bn" added Barclays.