It would appear the cleanest dirty shirt is losing its appeal [5] as both bonds and stocks are being sold this morning and the JPY and EUR are rallying as the liquidity washes back home. The USD Index is back at its 10DMA again but it seems the building tension in Europe (Turkey and now the potential for a collapse in the Greek coalition over the ERT closure - which we warned about yesterday [6]) and Abenomics hangover is leading to an unwind of these levered carry trades everywhere around the world.
[7]
everywhere...
[8]
The potential catalyst this morning (via ekathimerini [9]):
Earlier, PASOK issued a statement saying that Samaras had raised the possibility of closing down ERT during a meeting with Kouvelis and Venizelos on Sunday. Samaras, PASOK, claimed said this was the only way Greece would meet its commitment to the troika to fire 2,000 civil servants this summer so it could qualify for more bailout loans.PASOK claims that Kouvelis and Venizelos voiced their objections. The legislative act has not been signed by any of their ministers. Sources at Democratic Left told Kathimerini that if the government collapses as a result of ERT’s closure, it would be Samaras’s fault.
Greek bonds are now -17% from their highs 2 weeks ago and Greek stocks -25%!!