This time around the count down has started for Greece and they are really running out of time. Recent developments in the past 24 hours have been quite substantial and make no mistake about it Greece is going to default as IMF has send quite a strong message that they are not going to move the deadline for the debt repayment which is 30 Jun and the Greek referendum over paying/nopaying the debt is useless.
The tell-tale signs of disaster will start showing up by Monday if recent rumors regarding ECB not willingness to extend the ELA threshold. Given the increasing outflow of Greece deposits there is a high chance that the Greek banks will not open on Monday despite the fact the ECB increased the ELA threshold(emergency liquidity assistance) for the Greek banks last week. However this week the rumors say ECB will end the emergency lending to Greece's banks on Sunday which will be the precursor of the capital control introduction----->Greek Banks will be close on Monday.
Unfortunately there is no other way around when it comes with Greece crisis and next step after they will default will be to exit the European monetary system. However they will still be part of the EU zone, I hope by now you can make the difference between the two. Many voices within the EU zone are becoming more skeptical of an agreement between the two parties and this persons are close to the ongoing negotiations between the two parties so I presume their worries are justified.
Many people blamed Tipsary/Varoufakis "couple" of bluffing in front of IMF/ECB, however recent developments shows no flexibility between the two parties and they are both serious about keeping their stance and be firm in the ongoing negotiations. It's a dangerous cat and mouse game they are playing and this can be a trap because it puts them in an impossible situation of not giving them enough room to reach a last minute agreement.
They say the Black Swan events are characterized by rarity and extreme impact and once again the financial markets are proving this to be wrong as theory has nothing to do with reality
. Not so long ago we had the SNB event which disrupted the market activity. Can Grexit be the catalyst for the next black swan event? Sure it can, however the probabilities are much more less to happen but that doesn't mean we won't have risk aversion as portfolio re-allocations and re-positioning of market participants in case of a such event will produce some volatility of at least 2 standard deviation.
If you ask me I think the euro will rally after an initial sell off- knee jerk reaction, because the euro will be better off without Greece in the first place. And secondly there will be an influx of capital as people will rush buying the DAX thus the demand for euro will be higher as people will be better of holding other securities than cash.
It seems that once again Dukascopy is ahead of the heard and they already took some measures to ensure and guarantee the stability of Dukascopy. Now after the SNB event many other brokers are sending warning messages to their clients and some have even close clients positions over the weekend going into the new week with no exposure on euro pairs.
One more thing to add using stop loss in this situation is futile and only shows you don't understand market microstructure, big boys have other measures to protect themselves.
I always say it's better to be out than be in and wishing to be out.
For sure there will be an interesting week ahead of us so keep your mind open and be very flexible with your trading, taking a vacation will not be bad as well there is no need to risk your money on high uncertainty risk events.
Best Regards,
Daytrader21
- Greece bank Run
Photo Source: TheGuardian
The tell-tale signs of disaster will start showing up by Monday if recent rumors regarding ECB not willingness to extend the ELA threshold. Given the increasing outflow of Greece deposits there is a high chance that the Greek banks will not open on Monday despite the fact the ECB increased the ELA threshold(emergency liquidity assistance) for the Greek banks last week. However this week the rumors say ECB will end the emergency lending to Greece's banks on Sunday which will be the precursor of the capital control introduction----->Greek Banks will be close on Monday.
Figure 1. Greek Bank Private Sector Deposits
- Grexit 'almost inevitable now' Austria's finance minister
Unfortunately there is no other way around when it comes with Greece crisis and next step after they will default will be to exit the European monetary system. However they will still be part of the EU zone, I hope by now you can make the difference between the two. Many voices within the EU zone are becoming more skeptical of an agreement between the two parties and this persons are close to the ongoing negotiations between the two parties so I presume their worries are justified.
- Tipsary/Varoufakis - NO Bluff IMF/ECB - NO Bluff
Many people blamed Tipsary/Varoufakis "couple" of bluffing in front of IMF/ECB, however recent developments shows no flexibility between the two parties and they are both serious about keeping their stance and be firm in the ongoing negotiations. It's a dangerous cat and mouse game they are playing and this can be a trap because it puts them in an impossible situation of not giving them enough room to reach a last minute agreement.
- FX Market and FX Brokers
They say the Black Swan events are characterized by rarity and extreme impact and once again the financial markets are proving this to be wrong as theory has nothing to do with reality
. Not so long ago we had the SNB event which disrupted the market activity. Can Grexit be the catalyst for the next black swan event? Sure it can, however the probabilities are much more less to happen but that doesn't mean we won't have risk aversion as portfolio re-allocations and re-positioning of market participants in case of a such event will produce some volatility of at least 2 standard deviation."Markets have consistently experienced " 100-year events" every five years"PT Jones 2010 Flash Crash--> 2015 SNB Black Swan Event--> 2020??
If you ask me I think the euro will rally after an initial sell off- knee jerk reaction, because the euro will be better off without Greece in the first place. And secondly there will be an influx of capital as people will rush buying the DAX thus the demand for euro will be higher as people will be better of holding other securities than cash.
It seems that once again Dukascopy is ahead of the heard and they already took some measures to ensure and guarantee the stability of Dukascopy. Now after the SNB event many other brokers are sending warning messages to their clients and some have even close clients positions over the weekend going into the new week with no exposure on euro pairs.
One more thing to add using stop loss in this situation is futile and only shows you don't understand market microstructure, big boys have other measures to protect themselves.
I always say it's better to be out than be in and wishing to be out
.
For sure there will be an interesting week ahead of us so keep your mind open and be very flexible with your trading, taking a vacation will not be bad as well
there is no need to risk your money on high uncertainty risk events.Best Regards,
Daytrader21
