Greek Non-News Of The Day Comes Just In Time To Spike Futures
The biggest non-news of the morning, that Greece has formally requested aid, which of course manages to spike idiotic US stocks as per usual, was that Greece formally requested aid. Yeah, nobody saw that coming. The issue is this proves absolutely nothing, with the EURUSD moving a tad higher and with Greek bonds still in the 8% range. What the futures gunners don't care about is that the activation mechanism remains unchanged and still needs the formal approval of Germany, which as we pointed out yesterday has now seen major opposition political parties step ahead of the process, in essence blocking the entire rescue. But who cares: the dollar is slightly weaker and all the carry traders are going nuts, so buy, buy, buy.
From Market News:
The German government reaffirmed Friday that an activation of the aid program for Greece requires an IMF consolidation
program, and that Eurozone heads of state and government must approve the request.
“The activation mechanism remains unchanged,” German government spokesman Christoph Steegmans said at a regular government press conference.
The Greek government requested on Friday that the aid plan offered jointly by its Eurozone partners and the IMF be formally activated.
German Finance Ministry spokesman Michael Offer said the “aid request has not reached us yet, but if it should be the case, the federal government will be ready to act immediately.”
Nevertheless, Offer then insisted that at least until the end of May, Greece does not have an acute financing need. Thus, Germany will not face any time pressure regarding its share of the aid package, he argued.
Eurozone members have said they will provide up to E30 billion in bilateral loans for Greece this year in a joint program with the IMF. Germany’s share would amount to up to E8.4 billion. German Finance Minister Wolfgang Schaeuble said on Wednesday that most experts estimated the likely IMF contribution at between E10 billion and E15 billion.