EUR USD (1.3170) The multiple negotiations taking place around Greece seem to each be in a state of limbo. The Eurogroup chief, Juncker, has postponed the emergency finance ministers’ meeting to approve the €130 billion aid package and apparently a teleconference will be convened. Juncker cited unfinished ‘technical work’ and lack of assurances from the Greek politicians to implement austerity measures as the reason for the delay. On the PSI front too, the Handelsblatt reports that an insufficient number of banks have been identified as willing to take voluntary haircuts on Greek debt. In any case, Greek economic statistics are pointing to the downside: Q4 GDP just fell seven percent and reportedly a quarter of Greek businesses have gone bankrupt since 2009, youth unemployment is soaring and Greeks have taken at least one third of their cash out of their savings accounts. Several prominent European politicians including the German finance minister say that the eurozone is better prepared for the Greek default than two years ago. Given that the euro is barely changed on yesterday morning despite the perceived proximity of default, it seems the markets are already pricing in events beyond that, namely a change in the constituency of the euro area. Yesterday’s the euro’s short-lived pullback ejected us from our bullish strategy, though we would only reckon with major corrections below 1.3075. Resistances are now at 1.3215 (weak) and at 1.3395.
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Deutsche Bank