CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Latest on PSI

Article By: ,  Financial Analyst
March 8, 2012 4:59 PM

According to Greek websites, the latest on PSI take-up currently stands between 77% and 79%, with rumors of a take-up as high as 90%. The deadline for Greek bondholders to accept the PSI offer on Greek law bonds is Thursday 8pm GMT. Results are due on Friday at 6am GMT.

Volatility seen surging after PSI deadline (near US close)
Since the deadline for accepting the PSI offer is at 8pm GMT, (3pm EST) we should expect a barrage of rumours from Greek and other European websites announcing their estimate/predictions of the final results. This would be the equivalent to exit polls in the US presidential elections, when market reaction will always escalate despite at an early stage.

But market players will not forget two other developments later on Friday:
i) Likely RRR cut from China on Friday morning, which does make sense after this week’s lower than usual GDP outlook.
ii) US jobs report, which could serve as a game changer as far as ending hopes of an outright QE3.

Note: any sterilized form of QE3 will be no different from Operation Twist, hence will not be welcomed by he markets as did QE1 & QE2. 

Don’t Forget the Rating Agencies
If we have learned anything over the last six months, it is that credit rating agencies usually disappear from the headlines during important news-days (such as run-up to important EU summits), before striking back with a downgrade or a warning. If the pattern holds, then we can expect one of the major agencies (most likely S&P or Fitch) to dampen any optimism from a sufficient take-up in the PSI deal.

Reminder: All these PSI acrobatics are aimed at enabling Greece to receive its second bailout and meet its March 20th payment. There are no guarantees that Greece will not need a third bailout as the nation enters its sixth year of recession as well as prolonged policy following the outcome of the April elections.

ECB lowers growth, cautions on Inflation as euro faces “another D-day” The ECB lowered its 2013 GDP outlook range to 0.0% to 2.2%, compared to 0.3%-2.2% issued previously. But the bank also paid lip service to inflation, saying CPI could stand a little above its preferred target of 2% later this year. We say “lip service” because the Frankfurt-based central bank is aware of Germany’s opposition to the potentially inflationary LTROs. As long as these funds are not lent out (especially considering tightened lending standards), the risk of inflation may be limited to exogenous factors (rising energy prices, weak currency) rather than a demand-lend overheating in prices.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024