Another day passes with no deal on Greece and investors are likely to want to position themselves for negotiations to go on into the weekend by reducing exposure to risk assets. Indices are a little softer on the open and the euro is offered as we see yet another classic situation when it comes to the Eurozone with things going down to the wire. Investors however remain optimistic that a deal will be struck ahead of next week’s IMF payment deadline throwing Greece yet another lifeline.
If the expected deal does come over the weekend then investors will not be able to react until Monday and there could be disappointment if Greece is afforded just the extension to its existing bailout which will only fund the country through the summer. The political will that has so far kept the Eurozone intact is being tested more than it has ever been before and is likely to be further. It’s just a question of whether politicians and in particular Greece’s creditors have the staying power.
Fuether reading:
US jobless claims 271K, core PCE +1.2% y/y – as expected, USD ticks higher
GBP/USD: Limited Pullback; EUR/JPY: Double Top – SocGen
