Tag: Greek bailout
Despite remaining uncertainties, it looks likely that Greece will receive its money. Equally likely, going forward Euro-zone countries will have to take further losses on their exposure to Greece, while the outlook for the country remains clouded to say the least. The cost of the numerous meetings on Greece has been a further erosion of credibility.
Not too long ago, I had high expectations for this week’s EU Summit
There are several options to give Greece more time to reform its economy but trickier still is convincing the IMF the debt remains sustainable. In any case, it looks all but certain that Greek debt will need to be restructured again - sooner or later - meaning losses for the public-sector creditors.
We have made minor adjustments to our financial forecasts. The storyline is more or less unchanged.
There are no important key figures next week. Two major events can change sentiment: the Troika mission will land in Athens on Monday and the EU Summit Thursday and Friday
Now the tough part begins: re-negotiating the terms of the Greek stability programme. The two sides are likely to be miles apart in their demands to begin with.
The world is still here today! The currency markets reacted positively to the outcome of Greek elections. The 17th of June was "make it or break it" for EUR in many eyes and hence no surprise the EURUSD jumped to 1.2748 on the news.
The pro-bailout parties secured enough seats to form a government at Sunday’s election. That is a relief to the markets, but does not solve the debt crisis.
Most of next week will most likely be spent digesting the Greek elections results and (the chance of) possible stimulus measures, and few interesting entries in the calendar.
Our baseline scenario is that Greece will remain in the Euro area, BUT that requires forming a government as a first step.
The minute I read that Spain's Prime Minister's comment that he can now with light heart take off to the football championship this weekend ("now that the situation is resolved"), I knew the EURUSD would be relieved. And here it came, a jump to 1.2671 yesterday night. Or, was it because Germany and Denmark won this weekend? ...
The Spanish bailout will probably give some relief to the markets in the near term, but it is likely to be limited because it will not end the debt crisis, the Greek elections are still looming, and Spain may need more help eventually and risks downgrades following the bailout.
Contrary to our expectations, the ECB kept interest unchanged at today’s meeting. We expect a rate cut in July.
Can the Euro area survive a Greek exit? Will Spain ask for an EU/IMF bailout? What actions will be taken at the 28-29 June EU summit and will it be enough to secure the survival of the common currency in the longer term?
We still find it most likely that Greece will remain in the Euro area, at least in the near term, but have to ask what happens if they do not?
Politicians have started to show a sense of urgency, but decisive measures will take years to implement. Still the EU summit on 28-29 June might give some rough sketch of a road map for further integration.
New elections have been called in Greece and so we look at the timeline of what might happen in the coming months and the consequences if a solution to Greece's problems is not found.
With market strains increasing rapidly, the ECB remains the one with the capacity to react fast. After the ECB has acted first to try to bring some calmness to markets, something could happen on the government front as well.
Everybody thinks it is almost certain Greece will leave the Euro-zone. And while it might happen, is it really that certain?
News that the Democratic Left have tentatively agreed to participate in a grand coalition offers hope of a new Greek government being announced this weekend.
With 99% of the votes from Sunday’s general elections counted, the two “big” parties – the conservative New Democracy and the socialist PASOK – won 149 seats in the 300-seat parliament and hence lack two seats to form a majority coalition.
Markets are expected to set out with a negative tone towards risk today after the uncertain Greek election outcome and the very soft US employment report Friday. Hollande won in France, as expected.
The ECB's bond purchases have been very modest recently. Arguably, bigger purchases would not even have been necessary lately. However, the Securities Markets Programme of the ECB has become more of a blunt weapon also in general, and has less potential to fight the debt crisis, if the need arises again.
Making a case for why an improvement could be lurking beneath the fog of doom and gloom.
Nordea's Chief Analyst on the euro area presents his view on the latest developments in the European debt crisis.
• Future path of Greece and sovereign debt crisis highly uncertain • Only the ECB can comfort markets via committed bond purchases – directly or indirectly • Stay in the inner AAA-space, long duration, curve flatteners and long spread-over
After much nail biting European leaders finally succeeded: The series of summits among EU countries led to a comprehensive agreement on how the debt crisis can be contained, and a new financial crisis can be avoided.
The Euro area debt crisis roils financial markets once again. Is a break up of the Euro area imminent or is the stand-off between Greece and Germany just another thorny step on the road? We take a look at consequences for financial markets.
In the late European session on Friday, the Spiegel story that Greece was considering leaving the Euro sent jitters through financial markets.
Slowing growth is increasingly putting downward pressure on asset prices and bond yields.