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FXstreet.com (Barcelona) - Commerzbank analysts believe investors are cautious ahead of the US labour market report on Friday and the US elections over the weekend. Greece is back: "While the head of the government, Antonis Samaras, announced an agreement about the austerity and reform measures with the country's creditors yesterday, the Democratic Left, the smallest of the coalition partners, rejected the labor market reforms agreed with the troika", wrote analyst Lutz Karpowitz, pointing to the urgency of a decision by the Parliament on 7th November, adding that failure here will stop Greece from receiving the tranche of €31.5B (already due in June), and the inevitable bankruptcy in mid-November.

"As a result there is a danger that the Greece bailout could fail for political reasons on two fronts: first of all the Ministers of Finance will have to agree on how to find the additional funds required for the deficit Greece will now be running for longer than expected. They will convene in a telephone conference on the matter today (which we had mistakenly announced for yesterday). The measures will be impossible to implement without the involvement of the national parliaments though", Karpowitz wrote, adding that there is also the chance of Greece itself preventing the bailout as the two large coalition parties Nea Dimokratia and PASOK (with narrow majority on their own) could undermine the voting discipline due to tensions.

"The fact that the euro is not really suffering as a result of this uncertainty illustrates how hard-nosed the FX market has become as a result of the debt crisis. Should no progress be made in today's telephone conference with the fronts in Athens hardening further uncertainty might begin to rise slowly", concluded the Commerzbank analyst.

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