Greece remains the focus of investor sentiment as private sector bond holders and the government attempt to reach a deal. The deal is reportedly going to involve a hair-cut of around 70%, but the point under the most contention appears to be the coupon rate offered to private investors. The IMF and some European officials believe that the current rate being negotiated is too high given Greece’s current economic situation.
Nevertheless, the IIF does sound hopeful that an arrangement can be reached, noting that elements of the deal are coming into place. This represents a more optimistic tone that we are used to seeing from the IIF, but we are unnerved by the fact that IIF Chair Dallara and his second in command have apparently left Athens, leaving the job of negotiating a deal to a smaller team of IIF members. We are now doubtful that a deal will be ready for the EU meeting today. In which case, EU members will not be able to sign off on Greece’s next austerity package, which Athens needs to avoid a disorderly default on March 20.
Price action this morning highlights how nervous investors are over the Greek situation, with the euro hitting 1.2851 shortly after FX markets opened. AUD/USD also took a hit but managed to recover some ground ahead of PPI figures out of Australia. The headline figure came in at +0.3% q/q, slightly lower than the expected +0.4% q/q.
Markets in Asia might be fairly subdued today due to New Year holidays throughout the region keeping some markets closed. Furthermore, there is a complete lack of headline data releases during the session and traders could be unwilling to make big moves without confirmation from European markets.
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Asia Open: Once Again, Greece Dominates Investor Sentiment
Published 01/22/2012, 11:40 PM
Updated 05/18/2020, 08:00 AM
Asia Open: Once Again, Greece Dominates Investor Sentiment
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