Risk-off as Greece continues to struggle

The US dollar was stronger against all of the G10 except against the Japanese yen as risk aversion resurfaced surrounding the Greek debt crisis. The two day EcoFin meeting of concluded over the weekend with a lack of significant progress and concern is growing as to whether Greece will be able to receive the next tranche of aid to avoid a default. German Finance Minister Schaeuble said that Greece must show the Troika that it is fulfilling its commitments for the next tranche to be paid. Greece Finance Minister Venizelos will hold a conference call today around 7pm (1200ET) with the Troika (EU, IMF, ECB) which is expected to be crucial as Greece seeks its next aid payment.

Greek 2-year yields spiked higher today and are currently back above 61.25% and EUR/USD has been under pressure and is currently trading around 1.3660. Risk sentiment has turned lower as evidenced by negative equities, a stronger USD, lower US Treasury yields, stronger gold. European stock markets are trading in negative territory ahead of the call with the Euro Stoxx 50 currently lower by about -2.43% and the German DAX currently down about -2.64%. The yen was stronger across the board, gaining on safe haven flows. USD/JPY fell after being rejected from the 21-day simple moving average and continues to flirt with record low levels.

In Germany, Chancellor Merkel’s party lost seats as it was defeated in a Berlin state election. The campaign was focused around skepticism over Euro zone bailouts.

The economic data flow out of North America today is light with only the NAHB housing market index for September due at 1000ET and a speech later in the day by the Bank of Canada’s Lane.

Источник: Forex.com

19.09.2011