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4 May 2015
Greek drama continues – ANZ
FXStreet (Barcelona) - With the negotiations between Greece and its creditors set to resume today, the talks might continue to drag on without any agreement as confidence remains an issue, as noted by ANZ.
Key Quotes
“According to Bloomberg interviews with contacts “familiar with the negotiations”, the parties remain far apart on key issues such as fiscal assumptions (the Greek Government is, not surprisingly, more optimistic than others), asset sales, and labour market and pension reforms. On the positive side, the negotiating atmosphere was said to be “much improved” following the side-lining of divisive Finance Minister Yanis Varoufakis.”
“The next deadline is 6 May when an EUR200m payment to the IMF is due, for which there should be sufficient cash. More important is the ECB meeting on 6 May, at which the conditions that should be attached to ongoing emergency lending (ELA) will be discussed, such as tougher discounts on the collateral it accepts. If ELA access is cut, it would rapidly be game over for Greece’s banks. The deadline after that is a second IMF payment due 12 May.”
“Greek 10-year bond yields reflect optimism that a deal will be reached, with yields at 10.2% well down from their mid-April highs of 13.6%. The Greek equity market has similarly rebounded.”
“Nonetheless confidence is fragile and could be easily lost should talks drag on without agreement. Negotiations resume today.”
Key Quotes
“According to Bloomberg interviews with contacts “familiar with the negotiations”, the parties remain far apart on key issues such as fiscal assumptions (the Greek Government is, not surprisingly, more optimistic than others), asset sales, and labour market and pension reforms. On the positive side, the negotiating atmosphere was said to be “much improved” following the side-lining of divisive Finance Minister Yanis Varoufakis.”
“The next deadline is 6 May when an EUR200m payment to the IMF is due, for which there should be sufficient cash. More important is the ECB meeting on 6 May, at which the conditions that should be attached to ongoing emergency lending (ELA) will be discussed, such as tougher discounts on the collateral it accepts. If ELA access is cut, it would rapidly be game over for Greece’s banks. The deadline after that is a second IMF payment due 12 May.”
“Greek 10-year bond yields reflect optimism that a deal will be reached, with yields at 10.2% well down from their mid-April highs of 13.6%. The Greek equity market has similarly rebounded.”
“Nonetheless confidence is fragile and could be easily lost should talks drag on without agreement. Negotiations resume today.”