The way the futures markets have been acting, one might wonder if a Greek exit from the Euro Zone will be Europe's version of the Lehman bankruptcy. When fears run high that Greece may take a hike, the markets go into deflationary mode. So when Germany, the main engine of European growth, disappoints on the business confidence front and fears that China could be dragged into a slowdown as their manufacturing data falls, it is no wonder why the markets are worried about the possibility of a Lehman moment. The HSBC Flash Purchasing Managers Index fell to 48.7 in May from 49.3 in April. In Europe a reading on manufacturing hit the lowest level in 35 months. Even assurances from Germany and other EU leaders that they want Greece to remain a member of the EU did not seem that reassuring. How dare Sweden suggest that Greece honor the terms of their bailout? So the Euro currency that has already hit the lowest level since 2010, continues to get pummeled and capital is looking to get out of harm's way.

Yet if everyone expects and prepares for a Greek exit, perhaps the Lehman moment may not be a moment but a way of life. In other words, Lehman caught everyone by surprise and now the problem with Greece and the rest of the PIIGS is perhaps when the market finally gets to the point of a Greek exit, it may be actually healthy for the Euro. Perhaps instead of contagion the pre-market stress on the EU system will get all of the skeletons out of the closet and the zone can start to heal. Yet if history is any example, before we get to that point we'll fix and break the eurozone many times in the future.

Can we fix Iran? Talks continue against a backdrop of ever rising oil inventories as supply in the US hit the highest level since August 1990. The Wall Street Journal said, Negotiations between global powers and Iran stretched into a second day, with Tehran demanding greater relief from economic sanctions in order to push forward with another round of diplomacy aimed at curbing its nuclear program, according to officials involved in the talks. The Obama administration and European countries held high hopes for the Baghdad negotiations, due in part to the belief that widening economic sanctions on Tehran could lead to Iran making some concessions.

But Iranian negotiators held firm on Thursday, arguing that any new round of negotiations after Baghdad must bring greater relief for Tehran from the West's sanctions campaign, according to these officials. The European Union is set to impose an embargo on all Iranian oil exports on July 1, while the U.S. is preparing to sanction Tehran's central bank.

Reuters reported that a U.N. watchdog report is expected to show that, Iran has installed more uranium enrichment centrifuges at an underground site, potentially boosting the output capacity of nuclear work and major powers want it to stop, Western diplomatic sources say.
Two sources said Iran may have placed in position nearly 350 machines since February - in addition to the almost 700 already operating at the Fordow facility for higher-grade enrichment - but that they were not yet being used to refine uranium.

Oil may bounce on these worries especially if it looks like the talks break down. Add to that oil is probably near the lower end of its trading range.

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