5 Jun 2015
Greek news affecting Eurostoxx more than FX markets – Nomura
FXStreet (Barcelona) - According to FX Strategists at Nomura, historical and recent movement in stocks and FX suggests a higher reaction by Eurostoxx and other equity indices exists on Greece headlines.
Key Quotes
“It is difficult to disentangle the effect from Greek relaxation and other factors, so it is easy to worry about the Greek event risk. However, the experience from 2015 is that Greece matters less and less to global markets.”
“Moreover, if we look at the price action around specific Greek news events, including the change in ECB collateral policy on February 4 and the ‘supposed deal’ on February 20, we note a pattern where it is the stock market that seems most sensitive to the news flows.”
“The euro does move, but other FX crosses are increasingly immune. Importantly, USDJPY seem to have become very insensitive to Greek news (and this is also the experience this week).”
“The implication is that we are likely to stick to long USDJPY exposure, even if there is potential for a Greek disappointment now that optimism has crept into implied expectations.”
“Away from FX, it may be worth considering trading Eurostoxx or other equity indices for alpha or hedging purposes, based on views around Greece.”
Key Quotes
“It is difficult to disentangle the effect from Greek relaxation and other factors, so it is easy to worry about the Greek event risk. However, the experience from 2015 is that Greece matters less and less to global markets.”
“Moreover, if we look at the price action around specific Greek news events, including the change in ECB collateral policy on February 4 and the ‘supposed deal’ on February 20, we note a pattern where it is the stock market that seems most sensitive to the news flows.”
“The euro does move, but other FX crosses are increasingly immune. Importantly, USDJPY seem to have become very insensitive to Greek news (and this is also the experience this week).”
“The implication is that we are likely to stick to long USDJPY exposure, even if there is potential for a Greek disappointment now that optimism has crept into implied expectations.”
“Away from FX, it may be worth considering trading Eurostoxx or other equity indices for alpha or hedging purposes, based on views around Greece.”