Greece gives in
Greece can point to some concessions in the deal brokered on its debt crisis, but the agreement that the Mediterranean state will have to put in front of parliament is little altered from that overwhelmingly rejected by the electorate in that infamous referendum on July 5.
Jean-Claude Juncker, president of the European Commission, moved quickly to say "I don't think Greek people were humiliated, it's a typical European arrangement".
Nevertheless, his priority has clearly been to circumvent a Grexit. That now looks like the case after the "unanimous" deal was brokered although it has been reported Finland had pushed for a temporary Grexit, whatever that might have entailed.
The deal is wroth €86-87 billion to Greece over the next three years, according to the Financial Times with €25 billion set aside for Greek banks and €50 billion for a Greek asset fund, according to Holland's finance minister Jeroen Djisselbloem.
As part of the new deal, Greece will have to repay €7 billion to the ECB by the end of August.
Over, over?
Can we now, finally, draw a line under the whole Greek saga? Head of forex at Saxo bank, John J Hardy, does not think so.
"It's really hard to see that this situation is over with and I think this is an issue that is going to drag on," he says. "Clarity is more important here than the actual headline news."
"Greece will also have to try to get this past parliament after a similar deal was rejected last week — this will be dragging on all week," he says.
Markets responded positively with DAX immediately jumping 1% on the breaking news, EURUSD jumping to 1.1175 from 1.11084 at 0630 GMT and equities throughout Europe enjoying a deal-brokered fillip.
EURUSD had returned to 1.1109 by 0749 GMT, as initial jubilation gave way to more sober reaction.
German bunds also reacted sharply to the news to lose a full point down to below 150 after having opened up at around the 151 mark after risk-off sentiment had seemed to be the order of the day. Peripheral bond yields meanwhile were benefiting from the "risk-off reversal," says Michael Boye, from the Fixed Income desk at Copenhagen.
"For now and the rest of the day, it is all about Greece and we'll get to know more as this details of this deal unfolds," he says.
That was bunds prior to the breaking news on Greece but they
slipped to 150 in the immediate aftermath. Source: Bloomberg
Chirpy Yellen
Meanwhile, Federal Reserve chair Janet Yellen chirped up at the weekend to once again raise the notion of a Fed rate hike before 2016 after talk of that nature had seemingly been quashed by the Greek situation, China's frightening stock markets collapse and a somewhat indifferent NFP report for June.
"The market is making a bet that external factors — Greece and China — will keep the Fed in cautious mode," says Hardy. "I think that Yellen is more focused on the domestic side of the equation and the retail sales data tomorrow could be key."
As far as USDJPY is concerned, this could see the pair move into "proxy risk-on" mode, he says.
"As long as we don't capitulate below those 200-daily moving averages on the pair and if we get a relatively bullish Fed on Wednesday and the equities rally continues, the bulls have got a real chance here," he says.
USDJPY was at 122.831 at 0655 GMT.
And finally...
Oil markets were once again on the slide as the weight of supply-side factors continue to mount, forcing Brent crude down to $57.52/barrel and WTI crude to $51.60/b.
Gold too has been unable to make use of its supposed safe-haven advantage and in the last hour, has slipped from $1,160.85/oz at 0655 GMT to $1,154.04/oz at 0805 GMT in the aftermath of the breaking news on Greece.