19 Jun 2015
Credit Agricole: No Greek resolution by Monday might trigger EUR's downside – eFXnews
FXStreet (Barcelona) - According to Credit Agricole, conditions are ripe for a Greece debt deal with its creditors but failing to do so by Monday might trigger a sustained downmove in the EUR, as noted by eFXnews.
Key Quotes
“For one it seems that the effort to reach a deal continues with an EU leaders' summit expected on Monday. In addition, yesterday we saw the first mass anti-government protests in Athens suggesting that the creditors' strategy may be paying off.”
“We further suspect that a potential statement today by the Governing Council that it will make any future ELA contingent on a reform deal could add to the pressure on the Tsipras government both internally and externally. All that should, hopefully, get us closer to a resolution.”
“That said, we are conscious of the fact that markets in Europe could start panicking if the deadlock persist into next week and the June 30 deadline draws near.”
“EUR seems to be holding firm for two reasons. One is the expectations that we could squeeze higher on the back of a successful outcome. The second reason is market positioning. Indeed, foreign investors unwinding long positions in EZ stocks and bonds also pare back short-EUR hedges, propping up the single currency.”
“All that said, we suspect that EUR should come under sustained downside pressure if we get no resolution by Monday and fears of Greek default and capital controls escalate next week. It still remains to be seen whether the Greek tragedy would remain a EURcentric development or trigger global risk aversion.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“For one it seems that the effort to reach a deal continues with an EU leaders' summit expected on Monday. In addition, yesterday we saw the first mass anti-government protests in Athens suggesting that the creditors' strategy may be paying off.”
“We further suspect that a potential statement today by the Governing Council that it will make any future ELA contingent on a reform deal could add to the pressure on the Tsipras government both internally and externally. All that should, hopefully, get us closer to a resolution.”
“That said, we are conscious of the fact that markets in Europe could start panicking if the deadlock persist into next week and the June 30 deadline draws near.”
“EUR seems to be holding firm for two reasons. One is the expectations that we could squeeze higher on the back of a successful outcome. The second reason is market positioning. Indeed, foreign investors unwinding long positions in EZ stocks and bonds also pare back short-EUR hedges, propping up the single currency.”
“All that said, we suspect that EUR should come under sustained downside pressure if we get no resolution by Monday and fears of Greek default and capital controls escalate next week. It still remains to be seen whether the Greek tragedy would remain a EURcentric development or trigger global risk aversion.”
This content has been provided under specific arrangement with eFXnews.