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2 Jun 2015
ECB to be non-event despite Greece - FXStreet
FXStreet (Guatemala) - Valeria Bednaik, chief analyst at FXStreet explained, with the ECB coming up and in regards to Greece, tensions have escalated to new extremes these past weeks.
Key Quotes:
"The latest bail-out deadline approaches: the latest agreement when Tsipras got with the government was for four months, meaning it will expire on June 30th. Furthermore, the country will have to face around €1.6B in payments to the IMF, with the first due maturity on Friday, June 5th."
"Mario Draghi has been trying to avoid getting involved in political discussions regarding the matter, but after his speech, it will be the turn of journalists to ask questions that most likely will be focused on Greece, the hot spot in Europe, and the ECB's willingness to continue extending emergency credit to Greek banks. The whole point of the ELA, is to be available to European banks that are solvent, but facing temporary liquidity problems. But are Greek banks actually solvent?"
"News on Friday showed that Greeks have pulled €5.6bn out of their accounts last month, leaving bank deposits at their lowest level since 2004 on fears of a default. Quite unlikely, the ECB can pull off the ELA support line to force the country into a deal, or default. Such announcement tomorrow will be a bomb, an unexpected surprise that can send the EUR in a sell-rally across the board. Chances however, don't favor such decision at this point, when the market talks are that a deal is close."
"Nevertheless, I'm inclined to consider the meeting will remain as a non-event ahead of Friday's US employment figures, whilst the EUR may continue advancing on an optimistic ECB and hopes a Greek deal will be achieved this week."
Key Quotes:
"The latest bail-out deadline approaches: the latest agreement when Tsipras got with the government was for four months, meaning it will expire on June 30th. Furthermore, the country will have to face around €1.6B in payments to the IMF, with the first due maturity on Friday, June 5th."
"Mario Draghi has been trying to avoid getting involved in political discussions regarding the matter, but after his speech, it will be the turn of journalists to ask questions that most likely will be focused on Greece, the hot spot in Europe, and the ECB's willingness to continue extending emergency credit to Greek banks. The whole point of the ELA, is to be available to European banks that are solvent, but facing temporary liquidity problems. But are Greek banks actually solvent?"
"News on Friday showed that Greeks have pulled €5.6bn out of their accounts last month, leaving bank deposits at their lowest level since 2004 on fears of a default. Quite unlikely, the ECB can pull off the ELA support line to force the country into a deal, or default. Such announcement tomorrow will be a bomb, an unexpected surprise that can send the EUR in a sell-rally across the board. Chances however, don't favor such decision at this point, when the market talks are that a deal is close."
"Nevertheless, I'm inclined to consider the meeting will remain as a non-event ahead of Friday's US employment figures, whilst the EUR may continue advancing on an optimistic ECB and hopes a Greek deal will be achieved this week."