IMF Dashes Hopes On Greek Deal June 12, 2015
IMF Walks Out Of Greek Deal Talks
During the London Live Room yesterday I discussed the potential for all the Greek rumors that turn around and get squashed is really getting out of hand, potentially turning into a “boy that cried wolf” scenario. Well yesterday we did get a little more confirmation on where the IMF stands. I recall about a week ago or more that the IMF was expressing that they may not even want to be part of a new deal with Greece due to the fact that the probability of Greece paying back any of its debt, considering the current state of the Greek economy, were very low at best.
Well yesterday they walked out frustrated and supposedly left Brussels. Quotes below are from the WSJ
The International Monetary Fund has halted bailout talks with Greece after a failure to make progress in negotiations, the IMF’s top spokesman said Thursday.
“There are major differences between us in most key areas,” said IMF spokesman Gerry Rice.
“There has been no progress in narrowing these differences recently. Thus, we are well away from an agreement,” he said.
Mr. Rice said the IMF team negotiating with Greece has been pulled out of Brussels, where talks had been occurring.
“The ball is very much in Greece’s court right now,” he said.
Ok so maybe we should have seen that coming if we believed the comments a week or so ago. However what puzzles me is why Bloomberg isnt being investigated for distributing false reports in order to make profit like was pointed out on Zero Hedge this morning.
But “two Bloomberg sources”, an organization which like Reuters, makes money from collecting commissions from trading and loves a surge in volatility, said yesterday a deal was assured. What gives?
Considering it took almost 24 hours for the official denial of the latest report we can conclude that i) the “two sources” (Bloomberg) made a lot of money trading based on their own leak and ii) since it took so long to reject the rumor, there was a lot of selling.
EUR/USD Runs Intraday Push Holding Chop
The EUR/USD did show some conviction to the downside yesterday with a intraday push back into the chop. I will be bias for the short today but I can also say I dont like the bottoming holding above 1.1221 so I will still be open for the long there with the right price action. However if it does test there I would rather be short from 1.1274.
GBP/USD Rejects Reversal
The GBP/USD pulled a reversal after the extended third push so the safer way to trade this pair is more open on direction with a slight bias long. The best levels are 1.5441 for a long with 1.5480 being a higher risk entry considering the chop. I will only consider a short from 1.5535 and will need to see they cant find liquidity above.
EUR/JPY Goes Into Chop Mode
With the EUR/JPY holding below 139.43 it reduces the potential for the extended move causing a full reversal but without any conviction below the Wednesday lows it cant be considered a third push either. The best option is to be more open today with a slight bias for the short. As with the EU the best levels are at the extremes of 139.43 for a short and 138.59 for a long with a higher risk potential short level at 139.09
Forex News Today
News events during London are slow again today. There are some medium impact events that should only get them moving on a big miss. Spanish CPI and HCIP will likely be a non event while Euro Zone Industrial Production has a better chance.
The US has PPI data expected to improve and considering the Retail Sales was slightly better yesterday then it should be close. Otherwise the chance for a miss to the upside is better the way I see it. Michigan Consumer Sentiment should be mostly priced in but bigger misses have been getting decent moves lately.
Have a great weekend
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