Greece gets extension, no disbursement
What happened overnight
– Euro group gives Greece a 2-year extension on fiscal targets
– Summit however fails to reach agreement on aid disbursements
– German Zew survey surprises weaker than expected in November
– UK CPI prints above consensus in October at 2.7%yoy
News from the euro area was the main catalyst for poor price action overnight, as the Eurogroup meeting failed to produce an agreement on Greece’s aid disbursement into year end. The trend was furthered by poor data, with Japanese machine orders and the German Zew survey falling sharply below expectations. As a result, the USD was generally stronger overnight, with the GBP as the main outperformer, supported by a strong CPI surprise. Price action in EURUSD was choppy, as the cross fell to a two-month low early in the session and rebounded later on an unconfirmed report that German policymakers had agreed on the disbursement of aid to Greece.
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