All eyes are focused towards the Eurozone crisis and traders will be nursing the situation very carefully. There has been reports late last night that the Greek banks may not be able to open on Monday due to a massive evaporation of cash from the Greek banks. Of course, if you have your money sitting in one of these deposit accounts and you see the officials playing the game of chicken, you will be highly concerned with the situation and want to take every cent out- as long as there no restrictions are around it.
The officials from Greece are looking towards their blood line and want the ECB to surge the ELA by another three billion euro during their emergency meeting which is taking place today. The country is in desperate need of cash and now it seems like that there could be resolution when the pressure is mounting. The IMF chief Christine Lagarde has also adopted a rough attitude when it comes to Greece, and confirmed that there will be no extension of dates for repayment and 30 June is the confirmed deadline. The coming weekend very much bring out the flash backs of Lehman crisis, because if the ECB does not agree to increase the ELA, we have a serious problem in the Eurozone.
However, when you look at the market you are surprised that it is not very much reflected. Especially the euro, which is trading above 1.13. Nevertheless, this has increased the demand for the German bonds and traders are selling the peripheral bonds.
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam