Tentative progress made over Greek deal

Monday, February 23, 2015

The Greek government rushed to finalise a proposal for economic reforms after Friday’s last minute deal which saw the current bailout terms extended by four months. A draft of the report ahead of formal evaluation from the ECB, European Commission and IMF later today built on Friday’s deal after eurozone officials complained that the deal put forward by Greece’s finance minister were not detailed enough and had not included estimates. The euro continued to consolidate sideways fluctuating between 1.13 and 1.145 against the dollar, a trading band which has dominated activity since the beginning of the month. Cracks are already starting to show in Syriza after a senior member accused the government of changing the labelling rather than any structural reforms arguing that there was no material difference between the previous situation with the troika and what is currently being negotiated.

Asian benchmark equity indices rallied to fresh highs on progress between Greece and its creditors, building on Friday’s positive session on Wall Street as risk appetite steadily improved. Both the TOPIX and Nikkei opened substantially higher and despite drifting lower throughout the session both indices managed to hold on to the early gains as upside momentum showed no signs of slowing down. The yen held above tentative support at the 50 day MA during overnight trading, trading back above 119.00 against the dollar towards the European open, as comments from an advisor to Prime Minister Shinzo Abe placated market participants who were previously worried that the currency could see further volatility. Specifically, Etsuro Honda commented that the yen had weakened to a “comfortable” level and the Bank of Japan could hold off from expanding stimulus for the meanwhile as the outlook for economic recovery looks stable. He went further to state that having the yen trade between 117.00 and 120.00 against the dollar was a comfortable level for the Japanese economy and that a weaker yen would boost consumer spending.

Spot gold prices extended declines for a second straight session on Friday as a tentative agreement between Greece and other eurozone members was made. Despite spiking towards $1,215/oz early on as jittery investors piled into the yellow metal, the encouraging progress made saw prices close 0.41% lower as moves on the downside targeted levels towards $1,200/oz. Activity overnight and early this morning has seen gold prices open around Friday’s close as downward pressure remains with the precious metal once again testing support at $1,200/oz.

EUR continues to trade sideways

EUR Curncy Euro Spot Daily 23 2015 02 23 07 53 48

JPY holds above support at the 50 day MA

JPY Curncy Japanese Yen Spot 2015 02 23 08 01 51

Spot gold prices edge lower on Greek progress

XAU Curncy Gold Spot Oz 2015 02 23 08 08 05

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All times UK Local Time


Topics: Gold, ECB, EUR, JPY, BoJ
More from: Kash Kamal