- A Look at the Majors
- What to Take from September’s FOMC Meeting
- Why September Jobs Data will Likely Be Strong
- Market Reaction to FOMC Outcome
- Forex Watch
- Cable Beware - The US Fed Has Room To Be Hawkish
- USD/CAD – Big Sell-off, Little Sell-off?
- US Dollar Basket
- EUR/NOK - We’ll be Just Like Norway!
- Main Foreign Exchange Market Drivers
- EUR/AUD: An RBA Rate Cut to Usher Us Back to 1.54?
- GBP/USD – Because Everyone’s Talking About It…
- Fed Set Cautious Tone at June Meeting
- EUR/GBP: Old Lang Syne
- Dollar Consolidation may Continue until Jobs Data
- Don't Expect Bank of England to Wait, Easing may Begin Next Week
- GBP/CHF: All Else Aside
- Brexit Sends Shock Waves Through Global Capital Markets
- USD/MXN: Inseparable Economies
- AUD/USD: Irrational Numbers
- CHF/JPY: The World Turned Upside Down
- The Fed, The Yen and the Pound
- Markets Have to Adjust as Fed Alters Course
- EUR/HUF: Indirectly Speaking
- AUD/NZD: Eggs in Basket Effect
- Why did Draghi Need to Act Now?
- The Yuan, and China’s Growth Path to Internationalization
- US Interest Rate Hike:
- a Matter of When, not If
- Greece and the Eurozone: Scenario analysis
- Actions vs. Words
- Grexit Fears Back on the Agenda
- Psychology more Important than Data in the Week Ahead
- Interest Rate Strategy
- The Effect of Illiquidity
- EURUSD to Break a 50 Year Average
- Japan Overshadowed, but Important Developments
- The Euro: Its Beginning, Its End, and Its Future
- Market Implications of May’s UK General Election
- Six Key Issues for Investors
- Market Mistakes Balanced Fed for Dovish Fed
- Hike or no Hike
- Why the Euro Bear Market is Only Half Over
- ECB Bond Buying Program Accelerates Euro Losses
- Dollar Bulls Charge Ahead
- Dollar Rally Still in Early Days
- Swiss Surprise
- Dramatic Losses in Greek Bonds and Stocks
- Market Catches Breath after Yesterday's OPEC-Induced Moves
- Diverging Monetary Policy Supports Ongoing US Dollar Rally
- FX Markets Volatility Ahead of the Fed Meeting
- Dollar Bulls in the Driver Seat, but Consolidation Looms
- Greater China and the USD/CNY
- BOE Governor excites Sterling bulls
- Currency Wars and Big Moves
- Japan and a Weaker Yen
- Commodity Currencies Await Green Light from Beijing
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Dramatic Losses in Greek Bonds and Stocks
Many global investors limited to investment grade markets or developed markets, as defined by MSCI have no direct exposure to Greece. Nevertheless, recent developments in Greece are worrisome to investors. Many fear that the political challenges in Greece could lead to its ultimate exit from the monetary union and default.
This concern has led to dramatic losses in Greek bonds and stocks. The last days' decline in Greek stocks (10.2%) is the largest since 1987. The 70 bp rise in the benchmark 10-year yield is among the largest of the year.
There have been a sequence of three issues that have forced the issue to the fore. First, over the weekend, the Greek Parliament approved the 2015 budget by 155-134 votes. The budget was opposed by the official creditors, the Troika (the IMF, EU, ECB), which had been seeking another 1.7 bln euro in budget savings. The government's budget went the opposite direction. It included relief from the tax on heating oil and the income tax surcharge. It assumed growth would be just shy of 3.0% next year.
Second, the eurozone finance ministers blocked efforts by Greek Prime Minister Samaras to exit the assistance program. Samaras was eager to exit and restore some of its sovereignty ahead of what will likely be elections in the early part of next year. Instead, a two month extension of the existing program was granted, pending final approval. This would be followed by a precautionary line of credit from the ESM. This may force the Greek government to amend its budget before the EU grants its necessary approval.