Intraday Market Thoughts

Greek Optimism Fading

by Adam Button
Jun 25, 2015 0:08

Markets began the week extremely hopeful about a Greek deal but a fresh sense of skepticism is suddenly in play. The kiwi and euro were the top performers Wednesday while the loonie lagged. Continuing meetings in Brussels will be the top headlines in Asia-Pac trading as talks stretch into the night.  

The sense of compromise and urgency to keep Greece in the Eurozone has vanished. Significant gaps remain in Greek talks with the IMF digging in its heels on tax hikes and military spending. Greece continues to insist on debt relief.

EU finance ministers were said to leave the latest meetings angry. A deal is highly unlikely in the hours ahead and that jeopardizes the entire Greek timeline. Talks at the highest levels are continuing but there is suddenly very little progress.

Trading the euro around Greek talks has been fraught with pitfalls. It may prove that yen crosses and risk-sensitive trades prove to be a better metric. The yen rallied late in the day and stocks fell as a stream of headlines raised eyebrows.

The S&P 500 fell 15 points on the day while USD/JPY skidded back to 123.90 from as high as 124.37.

The lone data point on the agenda is Australian job vacancies at 0130 GMT so it will all be about the tone of Eurozone meetings and leaks.

A new Premium trade was added in a JPY pair, with 3 charts supporting the trade.

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