Talking Points:
- Euro, Yen Volatility Ahead as Eurozone Officials Meet for Greece Crisis Talks
- Australian Dollar Little-Changed After Another Status-Quo RBA Rate Decision
Greece remains in focus as the aftermath of the weekend’s referendum rejecting the EU-proposed debt deal terms continues to play out. Eurozone finance ministers are set to hold an emergency meeting to discuss how to proceed from here. This will set the stage for a Eurozone leaders’ summit thereafter.
EU officials’ willingness to entertain further negations is in question. To resume talks now may be seen as rewarding Athens’ intransigence. Policymakers may not want to set such a precedent as Spain’s Syriza-like Podemos party prepares for elections just around the corner.
Meanwhile, with most Greek debt now held by non-private entities, default contagion risk appears diminished. As such, Brussels may opt to leave Greece in the wind, with any follow-on economic hardship to act as a cautionary tale for would-be imitators.
With this in mind, traders will keep a watchful eye on the rhetoric emerging out of today’s meetings. A conciliatory tone may raise hopes for progress and offer a boost to the euro as well as lift market-wide risk appetite, weighing on the safety-linked Japanese yen. Signs of reluctance to re-engage with Athens are stand to yield the opposite results.
