John J Hardy
In this latest webinar, Saxo Bank's head of FX strategy John Hardy analyses the market after the central bank of Turkey announced a huge rate hike.
Article / 13 July 2015 at 7:00 GMT

Morning Markets: Greek ultimatum unnerves markets



  • Brussels:  Eurogroup meeting – press briefing at 0900 GMT
  • India: Consumer Price Index (1200 GMT) 

Another week of Eurozone tension, nerves and brinkmanship beckons as a wave of risk-off sentiment swept markets in Asian trade following a weekend of angry and inconclusive negotiations in Brussels. But early Monday in Europe, rumours of a possible deal encouraged markets and Germany's DAX spiked sharply ahead of the official opening.

At stake, as newspapers around the world report this morning, are Greece's financial viability and the future of the European single currency itself. Reuters reports that the Eurogroup will reconvene this morning and hold a press briefing afterwards at 0900 GMT. 

The talks are proving are exceptionally difficult, arguably the toughest negotiations in the history of the Eurozone. While French president Francois Hollande fought tooth and nail to keep Greece within the fold, a Finnish hard-right party threatened to topple Finland's new coalition government if any concessions were given to the Greeks. And Germany's Angela Merkel issued Greece with an ultimatum that its parliament must pass a raft of reforms by Wednesday before any settlement is made. 

According to The Guardian, the Greek government faces a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc. One EU official described the measures as "extensive mental waterboarding".

And in a declaration resonant of ECB president Mario Draghi's famous "whatever it takes" statement on saving the euro when the bloc's debt crisis peaked, Angela Merkel yesterday signalled that this would not be the case this time around saying there "a deal at any price" was not an option.

If the Greek parliament does push through these measures, and if Germany subsequently approves, the Bundestag would then vote on a bailout on Friday. But this is a weak chain with a lot of caveats and many missing links. The unfolding drama will certainly dominate markets all week so be on guard to ad hoc headlines, developments and newsflashes from Brussels, Athens, Frankfurt and Berlin.

Market signals

Asian session

  • Chinese shares climbed 1.1% in opening trade, extending Friday's rise
  • The Shanghai Composite was up 3.02% to 3,994.80 (at 0520 GMT) 
  • China's exports rose 2.8% in June from a year earlier, while imports fell by 6.1%
  • The encouraging June figure was the first rise in exports in four months,
  • UBS forecasts the AUDUSD to tumble to just 0.70 by year's end

Forex ahead

  • Euro gaps -0.5% vs USD. Further volatility expected. 
  • EURJPY hammered by risk aversion, down circa 1%
  • Third straight Monday fall for EURUSD in Asia
  • EURCHF trading cautiously in 1.0443-77 range

From the Floor

Breaking Greece. “We’ll have to see what this reported deal on Greece is all about but the DAX is already up by 1%,” says Boye.

On the fence. ”Markets are making a bet that external influences – Greece and China – will keep the Fed cautious on rates,” says Hardy.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Risky business 
If a deal is done with Greece, then it's risk-on, while failure to resolve the debt impasse will see a massive risk-off – and present a great buying opportunity, writes Kay Van-Petersen

Healing touch
Debt restructuring on its own will not return Greece’s economy to a growth path, says Max McKegg. What it really needs is a decline in the real effective exchange rate.

Indian CPI is expected to tick slightly higher today and James Picerno asks whether this will threaten the emerging South Asian country's status as the world’s growth leader. 

Recovery opportunity
All eyes are focused on Greece, with the European Union having given it 72 hours to win its trust by passing bailout laws. Max McKegg scans the FX implications and spots a possible recovery opportunity in EURUSD.


Man in the middle: Alexis Tsipras flanked by Angela Merkel and Francois Hollande at last night's Eurozone leaders' emergency summit. Photo: European Council

Morning Markets goes out on the TradingFloor platform at 07:00 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.

Martin O'Rourke Martin O'Rourke
News is breaking that we may have a deal on Greece. More to follow in From the Floor in one hour.
Clare MacCarthy Clare MacCarthy
Markets are certainly taking the Tusk tweet seriously: European equities rally, euro up, bunds down.
Clare MacCarthy Clare MacCarthy
A caveat: any deal rests on formal approvals by myriad parliamentary groups and Europe's institutions.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail