 talk bonds in particular how markets have reacted to this and continue to react. Simon Michelle from SIGFIG Securities joins us now. How seriously is this being taken by the bond market Simon? Morning James, well we are starting to see markets react now you know we're in that last couple of weeks and what we saw on Friday was a bit of a sell-off of some of the periphery European sovereign names and and some of that demand going into Germany and also I think into the US as well as we saw yields for those nations pulled back so we are starting to see a little bit of reaction by markets now as they reposition and just start to pull back on the exposure to some of those more risky European nations and we're starting to see that reflected in yields over there. It's a little bit hard to know what's going out because on one day suddenly things are absolutely dandy markets are going high because everything's going to be sorted out no worries and then a couple of days later no oops sorry Gregson's back on the back on the table. Yeah it's been interesting hasn't it I mean the market's been quite complacent really and I think working under a view that you know a solution would be would result out of these negotiations either that or you know we'd see some delay put on that and we'd kick this issue down the road but you know I think we were talking last week that you know so we draw closer that if they don't come to a conclusion I think more importantly the the way to a solution you know isn't very clear at the moment especially with the political situation in Greece so I think markets are very suddenly all of a sudden sort of face that possibility we're seeing a lot more commentary around the impact of Greece leaving the euro so you know I think that's starting to be reflected in flows and pricing. Simon we know that over the weekend those talks failed they are continuing this week they have an important meeting coming up on Thursday so if we continue to see those talks you know caught up in a bit of a stalemate how do you expect markets to continue reacting do you expect this volatility to just increasing? Look I think it's absolutely right and I think certainly you know it's going to undo a little bit of the work that the ECB's been doing with this quantitative easing program it's going to see that reflected in yields you know I think you're going to see investors pull back on some of those periphery countries and pull back on exposure there I think you're going to see it quite quiet as we lead into that as people just sort of stand on the sidelines and wait to see what the outcome of this is going to play out over the next couple of weeks. Is there how realistic do you think the chance of Greece leaving the eurozone actually is my understanding is there's really there's no vehicle for that to happen there's no legislation by which that happens and look the idea of talking about them leaving is one thing but the actual mechanics of them leaving is an entirely different matter. That's exactly right James and you know I think there's a number of mechanisms that they can use but there's certainly no clear view on on how that would happen I mean obviously they would want to minimize volatility and you know manage that very very well but we don't know whether that would be you know on the back of a default with these creditors payments whether there would be some sort of you know a long period of you know transition essentially to try and minimize the impact the other thing is you know where does Greece go once it leaves the ECB and has no access to that support as well down the gurgle exactly that's exactly right so you know there's really no you know it's one thing to talk about the impact of the eurozone with the Greek except but then it's okay where does Greek go where does Greece go if they don't have access to that funding you know it'd be very difficult for them to get funding elsewhere in financial markets so a lot of issues that I think you know a lot of these stakeholders probably haven't really wanted to consider but markets are now starting to to wonder and price in that volatility certainly the saga continuing and expecting that it will continue to have an effect on markets globally this week but of course one of the other big focus points this week will be the Federal Reserve FOMC meeting so how are we seeing markets at the moment positioning themselves and in particular those US treasuries how are we seeing them positioning themselves ahead of that meeting yes interestingly and because we saw quite a big strong demand for US Treasury at the end of last week so that actually pushed the US yields back lower as people took advantage of that increase that we'd have at the beginning of this month so that was very you know very positive you know investors obviously still feel there's value in US yields that means that they don't think rates are going to go up anytime soon it'll all be about forward guidance I think from the from this meeting you know we're certainly not expecting any change in rates but the market will be looking is to get a clear picture of what the Fed's view is where they think this the move by the Fed in the Fed funds rate will be at the moment if you have a look at market expectation they're pricing in a December quarter so it'll be really you know do we start now thinking about 2016 as we've heard the IMF and the World Bank come out and suggest that the Fed might have to do or do we stick to that timing what do you think Janet Yellen and and the Fed think when they start getting a little bit of free advice from the likes of Obligard oh look I think that they would be very happy to hear it but you know what it means is not a great deal because you know they're more importantly looking to you know manage expectation both domestically obviously there are certainly some still some areas of concern in the US economy we've seen those raised by commentators recently as well but I think more importantly it's they just want that to be a manager or calm transition in Fed policy you know even if we do get an increase you know we're not going to get a you know a sudden number of increases on back to back it's going to be a very moderate increase it'll be a psychological move obviously when that first step up is but I think they've managed it very well if you look at markets you know we started to see a little bit of volatility now but we we are pushing that expectation a little bit longer obviously on the back of that slower growth expectation the US so I'm in a big week this week in terms of central bank activity locally we have the RBA releasing those minutes from their June board meeting tomorrow how are we seeing Aussie yields positioning ahead of that it's interesting very quiet obviously we had a bit of a pullback on Aussie yields last week as well after that strength in earlier this month I think it's you're right there's a lot of data we're waiting to get out to get a bit of a forward view from the central banks and with the RBA you know a lot in the media really about the impact of these lower interest rates housing obviously a big issue so it'll be interesting to see whether the RBA sticks on this you know fairly neutral bias at the moment yes you're you know they they do have an ability to move down but the impact of those movements is is lessening as rates fall lower and lower so I think the RBA will be all about sticking on the message that we saw on the back of their last minutes great stuff as always Simon thank you thanks James thanks Leanne