Greece

The Greek people have voted against the Eurozone and their proposed austerity measures. Much changed? Nope. Now all the excitement is over they’ll be back round the table shortly for more talks. Most investors are in ‘wait and see’ mode hence the sell-off in the Euro hasn’t been too severe. It fell around 1.3% after markets opened Sunday evening. Yes, the chances of a ‘Grexit’ are higher now although it is ultimately what the response is from Merkel et al that will dictate the direction of the Eurozone/Greece. The Euro has clawed back most of its losses in the European session. Do I think if Greece did leave it would cause untold misery for the financial markets? No, I don’t think it would cause anywhere near the meltdown some are proposing due to firewalls and safeguards that have been put in place. It would be a nuisance yes, although I think Greece would be managed out rather than leave abruptly. Will a deal be reached by tomorrow so the Greek Banks can open? I’d be surprised. We’ll know tomorrow. Let’s turn our attention away from Greece as every paper you read/news channel you watch will lead with the story today.

Euro

What will happen to the Euro this week? I think it is safe to say that it will get weaker before it gets stronger. I’d suggest there will be a sell off of the single currency although it will be a controlled one. If you are a Euro buyer I would suggest you implement market orders around 1.41 to take advantage of any upside moves. Please contact me to discuss implementing an order.

GBP and USD

GBP and USD has taken a back seat at the start of this week for obvious reasons. We have the Budget on Wednesday where we will hear from George Osborne. Expect volatility around Sterling. We also have FOMC minutes out of the US that will impact on Dollar crosses.

Update on Wednesday

We will be sending out another report on Wednesday with an update as I expect this week to be fast moving (Greek banks promised to open tomorrow etc)

If you have any questions in the interim please let me know.

Have a great week.

Written by Liam Alexander.