Greek talks over the weekend breakdown after 45 minutes

Monday, June 15, 2015

Talks between Greece and its creditors failed to reach a conclusion over the weekend as the threat of a Greek default and probability of a Greek exit from the euro became increasingly likely possibilities. Talks between Athens and eurozone lenders reached a stalemate and broke down after just 45 minutes on Sunday according to a statement released by the European Commission. The lack of progress hinges on creditors demanding that structural reforms be made to pensions with a primary budget surplus target in an effort to raise money for the indebted nation. However, with officials in Athens unwilling to compromise investors are slowly beginning to factor in the possibility of a Greek exit from the euro as the end of June deadline fast approaches. 

Treasury yields resumed their downward trajectory as demand for safe haven assets saw yields on 10 year German bunds fall for the third straight day early this morning, dropping back below 0.8% on rising Greek default risk. US government yields dropped to a one week low early this morning towards 2.3271%. Risk assets are expected to trade under pressure today as ongoing uncertainty surrounding a potential Greek default prompt investors to seek out safe havens.

Asian markets sold off overnight as talks failed to progress with benchmark equity indices across the region starting the week under significant pressure. Japanese stocks managed to tentatively hold near opening levels but Chinese mainland and Hong Kong listed stocks traded in negative territory throughout the majority of the session. The situation seems to be going from bad to worse for the Greek negotiating team after the IMF pulled out of talks late last week and Germany warned of the very real threat of a Greek exit from the euro. Pessimism from the Asian session spilled over into European trading with the majority of benchmarks in the region experiencing a subdued start to the week.   

German bund yields head lower on safe haven demand

GDBR10 Index Germany Generic Go 2015 06 15 07 27 06

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Topics: IMF, Greece, Yields
More from: Kash Kamal