Good morning. The big story this Thursday morning remains the on-going Greek situation. For much of Wednesday, Greek PM Tsipras was in meetings with the heads of the European Commission, the International Monetary Fund, the European Central Bank and other various EU ministers. Despite no
agreement, the EURUSD rate rose throughout the North American session as markets remain optimistic a deal will be struck. As we go to print this morning, the most important impasse remains between the IMF and Greece, which cannot find any common ground. As we move closer to Tuesday’s deadline, it will be interesting to see the tug-of-war in FX markets as an default could trigger a bank run, capital controls and possible an eventual Greek exit from the euro zone.
Economic data was very limited during Asian hours as all eyes remain pinned to Greek developments. Equity markets are most negative as Asia markets wrapped up as Greek leaders cry blackmail. While both sides continue to trade proposals, the rhetoric is building up again as members of Greece’s far-left decline any offers including VAT hikes and an increase to the retirement age. Greece is due to repay the IMF €1.6 billion on Tuesday, and any debt deal must be drafted into legislation and passed through Parliament. Tension is building throughout the markets and it feels as if every currency
pair in the world hangs in wait. One currency pair to keep an eye on is EURJPY. During the good old days of carry, EURJPY was forever the bellwether of risk and if we see a significant push lower, that could tell the story on the realities of the market as other safe havens as the franc and dollar rise. Like other majors, with a lack of news to cling to, its Greece all day, every day.
Read the rest of the article Greek negotiations continue