Today's entire surge in stocks and EURUSD was predicated on nothing more than momentum ignited from rumors of a report that a deal was imminent. So now that Germany has come out and stated - unequivocally - that:
- *GERMAN GOVT SURPRISED BY GREEK REPORTS OF PROGRESS: OFFICIAL
One might imagine some of the ramp would be removed.. and it is in EURUSD, but not in stocks. However, as JPMorgan warns "hope is not an investment case. The longer we go without a deal, the less likely we believe a deal becomes/the higher the chance of Grexit."
Rumors...denied...
- *LITTLE PROGRESS SEEN IN GREECE TALKS, GERMAN GOVT OFFICIAL SAYS
- *GERMAN GOVT SURPRISED BY GREEK REPORTS OF PROGRESS: OFFICIAL
- *GERMAN GOVERNMENT OFFICIAL COMMENTS IN DRESDEN, GERMANY
Talks between Greece and creditors haven’t made much progress on substance, a German government official says on sidelines of Group of Seven meeting in Dresden, Germany.
- German govt is surprised at comments by Greek officials today that accord is near: official
- German official asks not to be identified because talks are private
“Greece is dominating the headlines again and we retain our neutral weight within CEEMEA. We would spend our risk budget anywhere but the most volatile market in the region.
Valuations are low (Hellenic Telecommunications Organization (OTE) is at a bigger discount to European telcos than the ’12 Grexit scare), while our economists’ base case remains that a deal is struck to keep Greece in the Euro zone.
We hope that this proves to be the case, but hope is not an investment case. The longer we go without a deal, the less likely we believe a deal becomes/the higher the chance of Grexit.
What’s changed in the last 8 weeks? Not much: bank liquidity, state finances, consumer confidence and business confidence are all declining and non-performing loans are rising while negotiations go on.
* * *
And the farce continues...
