Intraday Market Thoughts

Greek Worries Persist

by Adam Button
Feb 21, 2012 23:04

US markets were less impressed by the Greek bailout with risk trades losing ground after a positive start to the day. The US dollar was the top performer while AUD lagged. There are no major events on the Asia-Pacific calendar. Mondays Premium Intermarket Insights are underway.

The post-bailout bounce in the euro was short lived as EUR/USD closed out the day down slightly. It is a sign of how willing the market is to sell euros and how many hurdles remain in the debt crisis.

The EU has signed off on a bailout but the IMF said it will not approve until early March. The take up on the PSI agreement is also in question. Greece introduced legislation that would impose a collective action clause so long as 66% of bondholders participate. A low turnout could trigger legal challenges and worsen the results if CDS are triggered.

The Greek economic situation also continues to deteriorate as deficit projections for this year worsened in a leaked government budget document.

EUR/USD ranged from 1.32-1.33 on the day with stops likely looming on either side. EUR/GBP is also threatening the top of the recent range.

On market that has taken a firm direction this week is commodities. The main reason was the Chinese RRR cut but removing uncertainty about Greece added fuel to the rally. Oil touched a 9-month high, copper rallied 3% and gold is testing the Dec/Feb highs of $1762.

The Asia-Pacific calendar is light but Australias wage price index at 0030 GMT could spark light trading. The consensus estimate is for a 0.8% q/q rise.

Mondays Premium trades are in progress; include EURUSD, USDJPY USDCAD, EURGBP, AUDNZD, gold, oil & ES.

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