11 Feb 2015
All eyes on Greece, EUR relief-rally ahead? - RBS
FXStreet (Bali) - According to RBS, the ongoing Greek funding talks should conclude in a short-term, stop-gap measure in place before the end of February, adding that even if no deal is reached, signs of substantive progress may provide near-term relief for the EUR.
Key Quotes
"Our base case scenario assumes the current discussions between Greece and its creditors will likely result in a short-term, stop-gap measure in place before the end of February to allow for further discussion on a longer-term solution. Still, the path to reach that expected endpoint remains fraught with uncertainty, both around the exact terms of an agreement and the timing of such an announcement."
"Between the EU Finance Ministers meeting on Wednesday to discuss Greek proposals and the EU Leaders’ Summit on Thursday, market participants will likely have a much clearer picture on the state of the discussion by Thursday. Pressure may intensify if a deal is not reached in meetings this week, and today German Finance Minister Schaeuble said a new Greek program will not be agreed on tomorrow."
"But even if no deal is reached, signs of substantive progress may provide near-term relief for the EUR. In any event, as the discussions on Greece create headline risk it is important to highlight that the underlying fundamental picture remains EUR negative, leaving us preferring to fade any EUR rallies on Greek optimism."
Key Quotes
"Our base case scenario assumes the current discussions between Greece and its creditors will likely result in a short-term, stop-gap measure in place before the end of February to allow for further discussion on a longer-term solution. Still, the path to reach that expected endpoint remains fraught with uncertainty, both around the exact terms of an agreement and the timing of such an announcement."
"Between the EU Finance Ministers meeting on Wednesday to discuss Greek proposals and the EU Leaders’ Summit on Thursday, market participants will likely have a much clearer picture on the state of the discussion by Thursday. Pressure may intensify if a deal is not reached in meetings this week, and today German Finance Minister Schaeuble said a new Greek program will not be agreed on tomorrow."
"But even if no deal is reached, signs of substantive progress may provide near-term relief for the EUR. In any event, as the discussions on Greece create headline risk it is important to highlight that the underlying fundamental picture remains EUR negative, leaving us preferring to fade any EUR rallies on Greek optimism."