Worrying less about Greece

20 July, 2015

For once, we start the week not worrying about Greece, or at least not as much as the previous three weekends. Still, there is the small issue of Greece having to repay EUR 3.5bln to the ECB today to cover maturing bonds owned by the central bank. This was a deadline that was not going to move, because defaulting on this would cause untold problems. The EUR 7bln bridge financing finalised on Friday was put in place to ensure that this did not happen. We’re seeing EURUSD recover from the lows made in the Asia session at 1.0820 against a slightly weaker dollar, especially against sterling and the Aussie. In general, we’ve seen currency volatility decline over the past couple of weeks, the CVIX (from Deutsche Bank) falling to levels last seen in late February.

For the week ahead, Greece will remain a factor, given the on-going disagreements between the European creditors and the IMF. The German Chancellor, in comments over the weekend, re-iterated that once the new program with Greece is in place, debt sustainability would be considered, but a haircut on nominal amounts outstanding was still off the table. The IMF continues to believe that this will not be sufficient. Elsewhere, the Aussie will have Tuesday’s RBA minutes to consider, together with inflation data on Wednesday. This weaker backdrop to commodity prices has put the Aussie under pressure in recent days and on that subject, note that Gold had a very messy Asia session, trading below the 1100 level. Sterling has also been volatile after Carney’s comments last week, suggesting an earlier interest rate rise around the turn of the year. The minutes to the latest BoE meeting are seen on Wednesday. For today, there are no major data releases, so we are likely to see a subdued start to the week, but volatility risks remain.


Source link  
Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...

US Equities at Record Levels

US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy...


USD Stabilizes

Hurricane Irma has, reportedly, inflicted less damage on the US mainland than was originally predicted, thereby reducing the economic impact of the devastation it was expected to...

Markets on Edge

With the markets risk appetite dampened after North Korea’s most powerful nuclear test to date, USD and Global equities fell whilst Gold, Yen and Sovereign Bonds all rose....

Risk Appetite Returns

North Korea official news agency reported on Monday that leader Kim Jong Un will watch the actions of the United States for a while longer before making a decision to fire missiles at Guam...


US-Korean Tensions Rattle Markets

Markets were cautious on Wednesday, as safe-haven assets pushed higher after tensions grew between the US and North Korea. Markets are concerned...

Global Manufacturing Grows

Recent data releases have shown that global manufacturing saw an increase in July, further confirming global economic momentum has carried into H2...

All Eyes on Central Banks

Markets were, for the most part, little changed on Wednesday as traders waited for today’s Bank of Japan and ECB rate decisions. Earlier today...

  


Share: