Initial thoughts: Greece requests a bailout…
City Index June 30, 2015 8:07 PM
<p>The news that Greece has requested a 2-year bailout programme from the ESM office has come as a surprise to the market after we spent […]</p>
The news that Greece has requested a 2-year bailout programme from the ESM office has come as a surprise to the market after we spent most of the morning accepting that Greece was going to default, but that everything would be ok if it did.
This throws a cat amongst the pigeons and leaves a number of freshly unanswered questions:
- Will the request be accepted? (Greece has also asked for debt restructuring, something that has not been allowed before).
- Will Greece be able to pay the IMF? The Greek Fin Min has reiterated that they will not pay ahead of tonight’s deadline.
- Will Sunday’s referendum go ahead?
- What does this mean for Grexit fears?
This all adds up to even more uncertainty. The markets are taking the news gingerly, and there has been no positive impact from this event. The Dax is still higher on the day; however it has dropped back about 80 pips since the announcement. Is this the market setting itself up for the bailout request to be rejected and for Greece to go ahead and default later?
We shall have to wait and see, one thing is for sure – 8 hours is a long time in this Greek crisis, and who knows what may happen ahead of the IMF deadline this evening.
Markets are probably right to wait on the side-lines until we get something solid out of the European authorities. In the meantime this is a great opportunity for precious metals and other safe havens to show what they’re good for during a very uncertain crisis.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.