6 Jul 2015
Market Movers: Greeks step up ‘Grexit’ risk – TDS
FXStreet (Barcelona) - Prashant Newnaha, Strategist at TD Securities, summarizes the key developments – Greece Referendum vote, and the financial market performance during the Asian trading session.
Key Quotes
“60% of Greek voters have rejected the Eurogroup’s proposals, contrary to polls conducted pre the referendum that suggested last night’s outcome would be a close call. As we saw when markets opened last Monday (29th June), the moves today have again been risk off, but appear tame vs the NO headline and given that the step up in GREXIT risk.”
“In FX, the JPY and the DXY are firmer (not a complete surprise) up a mild +0.3%, while the EUR is the worst performer. That said the EUR has performed over the Asian session, recovering from the US$1.0970 low seen near the Asian open, to be entering the London session near our session highs, down only 0.7%.”
“The rest of the G10 is off around 0.5% with the CHF weaker, –0.4% (a little surprising), NZD –0.15%, while the GBP is close to unchanged. In rates space, USTs are at levels seen last Monday, with the US 10yr 10bps lower to 2.27% while ACGBs in contrast have outperformed, 3yrs –13bps and the 10s –18bps.”
“Regional equities are in the red, the Nikkei off 2%, HK –3% and the ASX –1.5% but the run in Chinese equities has been bumpy with the near 8% gains on the open following weekend announcements to stabilise the markets unwound over the course of our session. While these developments would have been important in themselves, they have played second fiddle to the referendum outcome.”
“Lastly in the commodity patch, gold is unchanged on overnight developments but Brent is off 1.2%, copper is down 2.3% and iron ore futures in China are off nearly 4%.”
Key Quotes
“60% of Greek voters have rejected the Eurogroup’s proposals, contrary to polls conducted pre the referendum that suggested last night’s outcome would be a close call. As we saw when markets opened last Monday (29th June), the moves today have again been risk off, but appear tame vs the NO headline and given that the step up in GREXIT risk.”
“In FX, the JPY and the DXY are firmer (not a complete surprise) up a mild +0.3%, while the EUR is the worst performer. That said the EUR has performed over the Asian session, recovering from the US$1.0970 low seen near the Asian open, to be entering the London session near our session highs, down only 0.7%.”
“The rest of the G10 is off around 0.5% with the CHF weaker, –0.4% (a little surprising), NZD –0.15%, while the GBP is close to unchanged. In rates space, USTs are at levels seen last Monday, with the US 10yr 10bps lower to 2.27% while ACGBs in contrast have outperformed, 3yrs –13bps and the 10s –18bps.”
“Regional equities are in the red, the Nikkei off 2%, HK –3% and the ASX –1.5% but the run in Chinese equities has been bumpy with the near 8% gains on the open following weekend announcements to stabilise the markets unwound over the course of our session. While these developments would have been important in themselves, they have played second fiddle to the referendum outcome.”
“Lastly in the commodity patch, gold is unchanged on overnight developments but Brent is off 1.2%, copper is down 2.3% and iron ore futures in China are off nearly 4%.”