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9 Feb 2015
Possibility of a short-term agreement to provide liquidity to the Greek banks – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, comments that economists at SG are of the view that a short-term agreement might be made which will allow ECB to continue financing greek banks.
Key Quotes
“The Greek Government is digging in its heels, prompting the FT's Wofgang Munchau to observe that ‘All Grexit needs is more weeks like this'.”
“Even so, our economists expect a short-term agreement that allows the ECB to continue financing the Greek banks while talks continue. That, combined with the large short in EUR/USD, suggest that it will take a total collapse of talks to trigger a sharp move down in EUR/USD for now - even if the US/Euro 2yr-rate differential is at the widest level since June 2007.”
“The Euro will fall in due course, but positions need to be reduced first.”
Key Quotes
“The Greek Government is digging in its heels, prompting the FT's Wofgang Munchau to observe that ‘All Grexit needs is more weeks like this'.”
“Even so, our economists expect a short-term agreement that allows the ECB to continue financing the Greek banks while talks continue. That, combined with the large short in EUR/USD, suggest that it will take a total collapse of talks to trigger a sharp move down in EUR/USD for now - even if the US/Euro 2yr-rate differential is at the widest level since June 2007.”
“The Euro will fall in due course, but positions need to be reduced first.”