Archived IMT (2010.04.12)

SHOW THEM THE MONEY is exactly and finally what the Eurozone and IMF did when Eurozone members agreed to provide 30 bln in standby loans to Greece this year, supplemented by IMF loans of reportedly as much as 15 bln. The interest rate would be at around 5% for a 3-year loan, less than 7.40% demanded by bond markets. These funds are more a show of Eurozone/IMF solidarity aimed at enabling Greece to tap the bond markets at sustainable interest rates (below 7%), than an actual disbursement of funds. Greece reiterates it has not ask for money, but will use these agreements to raise as much as 1.2 bln through 3 and 6 month paper. EURUSD seems poised to extend gains towards $1.3780, while EURCHF may push towards 1.4550 as the SNB could feel encouraged to buy the pair with the wind at its back.