‘– BREAKING: Greece asks for 2 year bailout program from ESM —
Okay… I give up! After receiving so many requests on covering the Greece crisis, I finally decided to stand up for the demand and make your Tuesday 🙂 Here are 5 important things you need to know about the European as it develops this week.
1- Noise is everywhere
The media is overwhelming excited about the development of the story because of the ratings and the fact that if you are not writing about something everyone is talking about, your followers will start going elsewhere for the kick. Hence, here is my update about what everyone is talking about 🙂
2- Euro started the week with a record gap
Most dancing pairs across the forex dance floor opened the trading week with a massive jump. This was mostly visible on the daily charts (rather than the hourly charts) and mainly across the European currencies. Mr. Euro opened to a severe gap as dancing against Ms. USA (the EUR/USD pair) but his dance moves against Ms. Japanese Yen was what made the record as the EUR/JPY pair’s gap was around 300 pips… something even FX grandpas have never seen.
The good news is that they both recovered their losses shortly after Monday’s London open.
3- Markets other than forex were hit harder
It seems forex traders were already used to the Greece news and were more ready for what’s coming up. Risk aversion was later seen more in the speculative measures (like the S&P 500) and many stocks and shares tanked surprising my fellow stock traders… but chill out guys, this could be just a temporary chaos and your hard-earned stock investments could recover soon; especially once the reporters find something else to focus on other than Greece.
4- This is not necessarily a default
Needless to point out, the Greek government surprised market participants and Eurozone officials by pushing forward a referendum on whether Greece will officially accept ‘The Institutions’ proposals or reject them. The implications are severe even if the path the situation follows isn’t exactly clear. This is not necessarily a default and it doesn’t mean Greece will be leaving the Eurozone either (yet).
5- Bumpy road for European markets this week
Euro markets will be shaken through the upcoming week. We may see a progress made between now and the IMF payment today or the referendum on July 5th. There are certainly a number of things that need to unfold between now and the potential disaster. Meanwhile, a Greek media report has claimed that negotiations might restart between the government and the country’s creditors.
