9 Mar 2015
Grexit can’t be discarded yet – Rabobank
FXStreet (Barcelona) - The Rabobank Team comments on the ‘Greece is settled’ theme, noting that risks of any contagion from Greece are less but ‘Grexit’ risks can’t be discarded yet.
Key Quotes
“In Europe, the ECB is trying to sell the story that a healthy recovery is already underway as Q€ officially kicks-off today: yet negative yields across the curve in Bunds suggest markets say otherwise.”
“Moreover, the ‘Greece is settled’ meme also needs to be treated carefully given the provisional agreement is already cracking and government funds running out.”
“On Saturday an ECB member stated that the Greek people had been “deceived by all these populists”; on Sunday Greek PM Tsipras told Der Spiegel: “If we were to hold a referendum tomorrow with the question, ‘do you want your dignity or a continuation of this unworthy policy,’ then everyone would choose dignity regardless of difficulties that would accompany that decision”.”
“True, there are no signs of any contagion from Greece to other periphery bond markets (which instead flag a continuous grind into deflation); however, ‘Grexit’ concerns clearly can’t be discarded yet.”
Key Quotes
“In Europe, the ECB is trying to sell the story that a healthy recovery is already underway as Q€ officially kicks-off today: yet negative yields across the curve in Bunds suggest markets say otherwise.”
“Moreover, the ‘Greece is settled’ meme also needs to be treated carefully given the provisional agreement is already cracking and government funds running out.”
“On Saturday an ECB member stated that the Greek people had been “deceived by all these populists”; on Sunday Greek PM Tsipras told Der Spiegel: “If we were to hold a referendum tomorrow with the question, ‘do you want your dignity or a continuation of this unworthy policy,’ then everyone would choose dignity regardless of difficulties that would accompany that decision”.”
“True, there are no signs of any contagion from Greece to other periphery bond markets (which instead flag a continuous grind into deflation); however, ‘Grexit’ concerns clearly can’t be discarded yet.”