Greek Parliament to vote on a second batch of reforms today

There is another vote in the Greek Parliament today (just after midnight local time; 5am HKT). The bill covers civil procedures and the bank resolution directive. PM Tsipras has been publically voicing criticism of Syriza MPs refusing to support the measures but saying nothing on what they support as an alternative. While some Syriza MPs are explicitly calling for a return to the drachma, many of the rebels have said nothing either way (leaving the Euro area is still unpopular within Greece). 

Given the logical impossibility of both rejecting reforms and rejecting a EUR exit, Tsipras is expected to take a harder line on rebels (potentially striking them off the party list and/or allowing Syriza to break apart). Today's vote will go through with opposition support but the question again is how many MPs Syriza will lose. The outcome is unlikely to be market-moving on the day but will influence political developments in the months ahead. Many are still expecting elections in the autumn. 

Today's bill is also the last prerequisite for the formal start of ESM negotiations. The aim is to get these done by the first week of August to allow disbursement by mid-August in time for Greece's payment to the ECB on August 20. In practice nothing ever goes to plan and deadlines constantly slip but August 20 is a hard deadline because as things stand Greece does not have enough to make the next EUR3.2bn payment due to the ECB. Failure to wrap up ESM talks by mid-August would lead to renewed talk of EUR exit (and markets pushing back expectations for a Sept Fed hike).