European assets are taking a besting today as walks broke abruptly and inconclusively among Greek government officials and Euro zone creditors.
Greek government is going to face hard time, if it fails to live up to the creditors’ demand for reforms.
- Even if Greece is able to pay off IMF at the end of the month, without any assistance from European Governments, it surely doesn’t have enough to pay off ECB due in July and August.
So default by Greek government is a function of time, if it fails to seal an agreement.
Updates over the weekend –
- Greek government officials and Euro zone creditors had another week of standoff as deadline looms ahead.
- The Gap between Euro zone creditors and Greece as of now stands at € 2 billion of additional surplus, which Greek government is struggling to agree with, without bending their political agenda or so called red lines.
European assets –
- Greek stocks are down almost 7%, while 2 year yield is up almost 200 basis points to 27% around. Greek 10 year yield is around 12% today.
- Fear of contagion is creating havoc for equity market. German DAX is down more than 1%, France’s CAC40 is down -0.8%, Italy FTSE MIB is down 1.7%, and Spain’s IBEX 35 is down 1.2%.
- Pan European stock index, Eurostxx50 is down -1.2% so far.
Euro however, holding on to its range, currently trading at 1.124 against dollar.
The material has been provided by InstaForex Company – www.instaforex.com