Monday, June 29, 2015

Fear Greek markets: the spread salt, Milan -3.3%. Greek bonds … – Il Sole 24 Ore

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This article was published June 29, 2015 at 8:25.
The last change is the 29 June 2015 at 11:11.

As feared, the markets react badly to the news of the referendum greek. After the interruption of the talks on the bailout of creditors and the Greek authorities, the ECB has frozen vital funds to Greek banks, leaving Athens with no other choice but to close the doors to prevent the collapse. Greek Banks and Stock Exchange will be closed for the whole week, with a limit of 60 euro per day for the cash withdrawn at ATMs.
“The risk of a ‘Grexit’ is growing,” wrote today in a note Goldman Sachs.

The effects were immediately felt. The spread between BTPs and German Bunds in startup reached almost 200 points, jumping by about 80 basis points over the previous Friday (123). Then the differential fell violently, ranking around 150. A movement that could mean that the ECB intervened to buy bonds and curb the spread. Unprotected from the protection of the ECB Greek bonds to two years flying to 33% from 21% the previous Friday.

The ECB however can not certainly intervene on the stock market where the implications are paradoxically more evident. The lists of the old continent see go up in smoke 340 billion euro based on the Eurostoxx 600 that leaves on the ground 3.25%.

At the Milan Stock declines widespread on all titles. The FTSE MIB has come to transfer 5%, and then stabilized with a decline to around 3.5%, in line with the main lists of the euro.

In sharp decline in bank stocks with Intesa Sanpaolo and Unicredit returned to trading after a suspension for excessive downward. It is clear that an increase in spreads and yields on government bonds penalizes banks that hold the belly in a significant amount of securities.

In this situation remains tonic that the euro after slipping below 1.10 in the night in early trading is even rising over 1,113 (euro / dollar exchange and currency converter).

Meanwhile, there are the first statements on a day that promises to be highly volatile, precisely in relation the words of the charges involved in developing the institutional crisis. According to Ewald Nowotny, a member of the Governing Council of the ECB, the situation in Greece “is certainly dramatic when banks and stock exchange remain closed for a week. One can only hope that after the referendum we can get to a solution, “he said, adding that in the case of a” no “to the proposal of the creditors,” it is obvious that the options for further constructive discussions will be very limited. ” Failure to pay the IMF “does not mean immediate default,” he concluded.

In sharp fall but recovery from the lows of the day, the Asian markets, weighed down by fears of output Athens from euro zone after the stop of the talks at the weekend in the final fail to stem the heavy losses of the session . The lists seem to have overlooked the new rate cut of 0.25% decided by the Bank of China during the weekend. At the end of trade on the Shanghai Stock Exchange Composite Index, which collapsed during the session by more than 7%, closed down 3.34% while the Shenzhen Stock Exchange has left on the ground the 6.06%.



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