Greece Day Could be Here, EUR-USD Rises in Anticipation
Monday, February 20, 2012
There is still no final word, but it would appear that the long awaited second bailout
for Greece is essentially in the books. European finance ministers continue
to meet in Brussels as the final details are hammered out, including would
appears to be a 70% loss for private sector creditors. The EUR-USD was solidly
higher on expectations that Greece will get the funds it needs to avoid default
at the upcoming March 20th 14.5 billion bond payment. However, it should be
noted that even with the second bailout, Greece is forecast to have a debt-to-GDP
of 129% by 2020, and most observers feel that another bailout will be necessary
before all is said and done.
Nonetheless, European shares rose to a seven month high today. For anyone
who is interested in the minutia related to the hoped for agreement,
Reuters has a nice summary.
Today is President's Day in the U.S. and stock and bond markets are closed, though
futures were up and running. U.S. stock index futures were higher by around
.5%, indicating a positive open for tomorrow.
Also helping sentiment, overnight, China cut bank reserve requirements, lifting
shares across Asia. China continues to gradually ease monetary conditions
as the country's once hot property market cools, and European turmoil hits its export-driven
The data calendar is light this week, though some attention will be given to flash
Purchasing Manger's Index releases for China and the Euro area.
Precious metals benefitted from the Greek relief and monetary easing from China.
Spot gold prices were up $15.36 at $1,739.55 per troy ounce. Spot silver prices
were up $0.34 at $33.65 per troy ounce. The gold-silver ratio is at 51.69.
Commodities outside precious metals are broadly higher. WTI crude prices continue
their relentless advance, up another $1.68 at $104.92 per barrel. It should
be noted that January gasoline prices were the highest ever for that month.
Bernanke's and the Fed's contention that inflation is contained may need a rethink
before long. Copper futures were up $0.042 at $3.758 per pound.
Treasuries are closed in observance of President's day. The yield
on the 10-year Treasury is at 2.0%. The USD is broadly lower. The EUR-USD
is at 1.3241, up .77%.
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Disclaimer: Gainesville Coins "Market Updates and In the News Section"
provide our readers with features and analysis of the financial markets, and some
of the factors that may be affecting market direction. While the information is
obtained from sources we believe to be reliable, we do not guarantee its accuracy
or its completeness, and this information should not be considered investment advice.
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