6 Jul 2015
Greek referendum: 'No' vote sharply raises prospect of Grexit - BNZ
FXStreet (Bali) - The Greek referendum result sharply raises the prospect of an eventual Greek exit from the euro-zone, notes Kymberly Martin, Senior Market Strategist at Bank of New Zealand.
Key Quotes
"In effect, the result sharply raises the prospect of an eventual Greek exit from the euro-zone. Tsipras and his government have been handed a mandate from the Greek people to seek better terms in what will now be called a third bailout package (as opposed to an extension of the second)."
"Clearly, European leaders will not take this lightly. They have little incentive to improve the deal, for fear of encouraging embattled European nations to use similar tactics in the future.
"The near-term path is not very clear, with an official response from Europe unlikely before the European session. The first pressure point being scrutinised is the emergency credit line from the ECB to Greek banks."
"The ECB will likely keep this open until it gets clarity from political leaders. In any case, markets are in for a period of uncertainty and protracted negotiation. Risk assets (NZD and AUD among them) will suffer."
Key Quotes
"In effect, the result sharply raises the prospect of an eventual Greek exit from the euro-zone. Tsipras and his government have been handed a mandate from the Greek people to seek better terms in what will now be called a third bailout package (as opposed to an extension of the second)."
"Clearly, European leaders will not take this lightly. They have little incentive to improve the deal, for fear of encouraging embattled European nations to use similar tactics in the future.
"The near-term path is not very clear, with an official response from Europe unlikely before the European session. The first pressure point being scrutinised is the emergency credit line from the ECB to Greek banks."
"The ECB will likely keep this open until it gets clarity from political leaders. In any case, markets are in for a period of uncertainty and protracted negotiation. Risk assets (NZD and AUD among them) will suffer."