Earlier, European commission president Jean-Claude Juncker reportedly said Greek finance minister Yanis Varoufakis had become a hindrance to the attempts to broker a deal. Over in Athens the media is making much of this, as Helena Smith reports:

The banner headline in Ta Nea this evening says it all: “Junker ‘Varoufakis is not helping the negotiations.’”

“He is not helping the process. Mr Varoufakis is the finance minister of a country that has to confront huge problems and he doesn’t give the feeling that he knows that.” These comments from the EC president to the MNI news agency have caused a stir with every major news outlet leading on Jean Claude Junker’s indictment of the Greek finance minister.

“Essentially, Mr Juncker with his response is accusing Mr Varoufakis as the reason why negotiations aren’t moving forward,” the news portal newit.gr wrote this evening.

While insisting that he could trust Greek prime minister Alexis Tsipras, the EU chief’s description of his radical left Syriza party as “abnormal” has also sent tremors through the political scene.

Meanwhile, the Tsipras’ government issued a non-paper tonight saying today was spent reworking “different issues so that precious time isn’t lost.”

Not many in the EU would agree with that.

One EU official recently said: “if we go at the speed the Greeks are negotiating the process will conclude in April 2017.”

Greek two year bonds have continued to come under pressure, with the yield rising from 23.09% on Monday to 25.5%.

After all the confusion, this may be the upshot of the various meetings:

More US data, with consumer confidence and new home sales both beating expectations.

According to Conference Board figures, the May consumer confidence index came in at 95.4, up from a revised 94.3 in April and better than the expected 94.9.

Meanwhile single family home sales jumped 6.8% to a seasonally adjusted annual rate of 517,000 units, above forecasts of 510,000. March’s figure was revised up from 481,000 to 484,000.

But the strength of the dollar - currently around an eight year high against the yen - has put a dampener on the US stock market, with the Dow Jones Industrial Average down 152 points or 0.84%. The US currency has been lifted by Friday’s comments from US Federal Reserve chair Janet Yellen suggesting that, while a rate rise is not imminent, it could happen later in the year if the economy improves as expected. The consumer confidence and homes data today seems to feed into that theory.

European commission president Jean-Claude Juncker for one reckons there is a growing belief that a Greek default can be avoided. Juncker told the MNI news agency:

My impression after talking to a series of colleagues is that the feeling is growing that a default should be avoided.

On the other hand all those I’ve spoken to are insisting on the involvement of the (International Monetary Fund). No deal without the agreement of the IMF.

Back in the US, and new figures show that service sector growth slowed for the third month in a row in May.

The Markit preliminary purchasing managers index for services came in at 56.4, down from 57.4 in April . The composite index - an average of manufacturing and services - fell to 56.1 from 57 in April. Markit chief economist Chris Williamson said:

The rate of expansion remains below the buoyant rates seen throughout much of last year, as slower growth of service activity has been accompanied by a slowdown in the manufacturing sector, which has seen exporters hit by the stronger dollar.

Apparently it’s now a teleconference this afternoon between Greece and its creditors.

And the sense of frustration is palpable:

The idea of Greece consolidating all the payments due to the IMF in June into one lump sum could be risky unless a deal is done with its creditors. Here’s the full Reuters’ report on the idea:

Cash-strapped Greece could avoid paying back the IMF on June 5 and win more time to negotiate a funding deal without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month, officials said on Tuesday.

Greece has to repay the International Monetary Fund 300 million euros on June 5, the first of four instalments due in June that total 1.6 billion euros.

Cut off from markets, Athens has said it will not be able to make the June 5 payment without new loans from the euro zone, which insists it can only lend Greece more if the country agrees to reforms that would make its debt sustainable.

“There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment,” a senior euro zone official close to the talks with Athens said.

A second official close to the talks also acknowledged that possibility.

“That’s basically a technical treasury exercise and they could tell the IMF that this is how they want to do it and the IMF would probably have to be OK with that,” the first official said.

But the officials noted that Greece could only use such a trick if there was a credible prospect of a funding deal that could be communicated to markets and its citizens. Otherwise, the missed payment could trigger market panic and a bank run in Greece.

“So they would get a few extra weeks. But unless there is some perspective how they would deal with this full payment, it would be a risky thing for the Greeks to do. And the consequences would be unpredictable,” said the first official.

“People could want to withdraw their savings and who knows what Greece would have to do.”

On the other hand... Efi Koutsokosta, Euronews’s Brussels correspondent, reckons that negotiations between Greece are continuing.....

Now the Greek finance ministry is saying (according to Reuters) that a banking transaction tax and a levy on ATM withdrawals is “no longer” being discussed in talks with EU/IMF lenders. Not clear what that means if the talks have in fact been cancelled, however.

Enikos is also reporting that today’s talks between Greece and creditors is off.

They say:

The scheduled meeting of the so-called Brussels Group on the Greek bailout has been cancelled.

A Greek senior official did not give a reason for the cancellation of the meeting that was due to be held on Tuesday afternoon.

Interesting..... talks between Greece and its creditors in Brussels have been ‘postponed’, according to Greek financial website Capital.gr

Finally, some economic data is hitting the wires, from America.

And the news is that durable goods orders, excluding the volatile aircraft orders, jumped by 1.0% in April. That’s stronger than expected.

March’s reading has been revised higher too, helping to give the US dollar another nudge higher.

The trial of Tom Hayes, the former UBS and Citigroup trader accused of manipulating the Libor rate, has begun at Southwark Crown Court in London.

Here’s our early take:

A trader was motivated by greed as he acted as “ringmaster” in a “thoroughly dishonest and manipulative manner” to rig interbank lending rates, a court has heard.

Tom Hayes, 35, whose trial began on Tuesday, is alleged to have done “everything in his power” to manipulate the rates, known as Libor.

The former UBS and Citigroup trader, of Fleet, Hampshire, denies eight counts of conspiracy to defraud, covering a period from 2006 to 2010.

Mukul Chawla QC, prosecuting, said: “This case is about the dishonest rigging of bank rates for profit.” Chawla said of Hayes: “He behaved in a thoroughly dishonest and manipulative manner by repeatedly cheating those with whom he had entered into huge financial transactions. The motive was a simple one: it was greed.”

He added: “He was the ringmaster at the very centre, telling others around him what to do and in a number of cases rewarding them for their dishonest assistance.”

More here:

Mujtaba Rahman, analyst at Eurasia Group, reckons that Greece will probably reach a deal with the eurozone in time.

Despite the inflammatory talk of defying Greece’s creditors, Rahman believes that a compromise will be hammered out; and that Alexis Tsipras will only suffer a handful of defections.

He writes:

We continue to believe Tsipras will lose around 5-10 lawmakers from his coalition when the package is presented to parliament (potentially attached to a vote of confidence). But we suspect he will lose less than 12 MP’s allowing him to keep his parliamentary majority.

The key factor is energy minister Panagiotis Lafazanis, a leading light in Syriza who controls around 30 MPs through his Left Platform.

Rahman explains:

Albeit ideological, Lafazanis is a team player who understands the government and party’s needs need to come before those of the Left Platform, and importantly, believes Syriza can make a difference in government. He will therefore want to avoid creating the circumstances that could result in a National Unity government in which Syriza’s influence would be heavily diluted.

While Lafazanis will not support any deal, concessions over the fiscal primary surplus, labour and pensions should be enough to keep him and his MP’s in line. Moreover, Lafazanis has a lot of meddling power outside of parliament with the capacity to delay and water down implementation of reforms once they are legislated, as well as to challenge them in court. This affords him another less destructive avenue to express his disagreement with the deal rather than overthrowing the government.

However, it’s not clear how Tsipras’s junior coalition partner, the Independent Greeks, will react.

Rahman also flags up House Speaker Zoe Konstantopoulou, who could look to “claim the anti-austerity mantle” from Tsipras.

Yanis Varoufakis has apparently also indicated today that Greek savers might incur a ‘small’ fee when they use a machine [he’s been speaking to reporters in Athens].

This idea has been floating around for some time; one report suggested a €1 fee for withdrawals up to €1,000 (which wouldn’t raise much money or deter a bank run)

Heads-up: Greek finance minister Yanis Varoufakis has apparently pledged that Greece will meet its €305m repayment to the International Monetary Fund:

• GREEK FINANCE MINISTER VAROUFAKIS SAYS WE WILL PAY JUNE 5 IMF PAYMENT BECAUSE THERE WILL BE A DEAL BY THEN

Optimism across Britain’s retail industry has hit its highest level since 1988, according to the Confederation of British Industry this morning.

The CBI’s latest survey showed that growth in retail sales volumes picked up strongly in the year to May -- perhaps suggesting that falling prices are encouraging shoppers to spend more.

Expectations for next month are at their highest for 27 years. There’s only one black spot; DIY spending is down year-on-year.

Here’s some key points:

• 60% of respondents said volumes were up on a year ago, and 9% said they were down, giving a balance of +51%, a strong pick-up in sales growth on the previous month (+12%) and above expectations (+40%)
  
• Retailers expect sales volumes to grow again next month (rounded balance of +58%), with 63% expecting them to rise and 4% to fall
• Most sub-sectors reported growth in sales volumes, with grocers (+50%), non-specialised stores (+98%) and recreational goods (+100% – a survey record high). But hardware & DIY saw a fall in sales volumes on a year ago (-67%) – the lowest since April 2013

European commissioner Pierre Moscovici hasn’t changed his tune this morning.

Moscovici has just warned that there is no Plan B for Greece, and that more effort is needed to agree a reform plan.

The crisis continues to bring out the best in Greece’s street artists.

An (unnamed) German government official has told Reuters that Berlin still hopes Greece will meet its IMF repayment next week:

• GERMAN OFFICIAL SAYS ENCOURAGING THAT GREECE HAS SIGNALLED DESIRE TO PAY IMF ON JUNE 5
• GERMAN OFFICIAL SAYS THIS SUGGESTS THAT WE WON’T BE IN A DEFAULT SITUATION WITH GREECE AROUND JUNE 5
• GERMAN OFFICIAL SAYS NOT AWARE OF ANY PLANS FOR SPECIAL MEETING OF EUROGROUP IN EARLY JUNE

Another Greek government minister has floated the prospect of failing to repay the International Monetary Fund next month.

Deputy Minister of Social Insurance Dimitris Stratoulis told Mega TV this morning that pensions and wages must come first:

“If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, education”.

Stratoulis also argued that missing an IMF repayment isn’t a ‘credit event’ - ie, a formal default. That’s via Enikos:

Stratoulis is correct that failing to repay €305m to the IMF on 5 June probably would not count as an official default. And Greece would still have a month’s grace before the Fund gets really serious.

Bloomberg has pulled together a Q&A on this issue. Here’s a flavour:

Q: What will the IMF do?

A: A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement.

Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration.

Arnaud Masset, Market Analyst at online Swiss bank Swissquote also blamed Greece for the euro’s weakness today:

In Europe, mounting uncertainty about Greece’s next payment to the IMF on June 5 adds pressure on the single currency as Alexis Tsipras, Greece’s PM, declared that his government would accept a sustainable deal “but not a humiliating” agreement, threatening to default on €1.6bn loan repayment due to the IMF in June.

As a result, the fall of the euro against the dollar accelerates.

Kit Juckes, chief currency strategist at French bank Société Générale, sums up the situation this morning:

The Greek government will need some form of deal in order to release further funds if it is to avoid missing payments to the IMF in June. Whether Greek PM Tsipras can negotiate a deal that is acceptable to enough MPs of his party isn’t clear and markets are once again, very edgy.

Across the Mediterranean, there have been heavy losses by Spain’s ruling Popular Party to anti-austerity parties in regional and local elections. Peripheral European government bond spreads are wider though not drastically, but the euro is much weaker.

And indeed, the euro is still bobbing below the $1.09 mark, a one-month low.

European stock markets are being buffeted by the Greek crisis, and the Spanish regional election results.

The main indices are all in the red this morning, led by Madrid.

Spanish bank shares are still down, after anti-austerity candidates recorded strong gains at the expense of the governing PP party.

Greece’s two-year bonds are now at their weakest level in a month:

(that’s Estonian central bank governor Ardo Hansson)

Traders are also blaming Klaus Regling, the head of the European Stability Mechanism, for today’s euro selloff.

Regling has told Germany’s Bild newspaper that Greece risks insolvency if it doesn’t reach a deal as a matter of urgency.

He said:

“There is little time left... That’s why we’re working day and night for an agreement.

Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that,”

Those “ominous comments” have sent a shiver through trading floors, says Ilya Spivak, currency strategist at DailyFX.

Newsflash from Madrid; Spanish bank shares are falling, as last weekend’s regional election results ripple through the markets.

• EUROPEAN SHARES TURN NEGATIVE, SPANISH BANK STOCKS DOWN 2 % to 2.5%

That mirrors the fall in Spanish bonds this morning.

Analysts say that the success of the anti-austerity Podemos party have thrown prime minister Rajoy’s re-election strategy into doubt.

Reuters explains:

At a local level, the PP faces a new era of coalition and compromise for which it is ill-prepared.

Rajoy - whose party must form pacts with some of the new groups if it is to retain power in a number of regions, including Madrid - has campaigned hard against them. Earlier this month he said they were “gangs” and a threat to Spain’s political and economic stability.

More here: Rajoy’s Spanish re-election plan in doubt after local battering

The euro is continuing to lose ground, and is now down 0.85 of a cent against the US dollar at $1.089.

It’s not just about Greece, though. The dollar is romping ahead against most currencies this morning, on speculation that US interest rates will rise soon.

Federal Reserve chair Janet Yellen indicated last Friday that the Fed would act, if the US economy kept improving.

The euro is losing ground against almost every major currency today: