Despite the gravity of the situation in Greece, markets remained relatively calm yesterday. Pullbacks recorded for North American stock markets and the euro were approximately 0.5%, while the widening of credit spreads for Portuguese, Italian and Spanish bonds was contained. There was panic in energy markets however, as crude oil prices fell strongly.
Pressure on Greece is increasing, as the European Central Bank (ECB) announced yesterday that while it would not change the level of emergency loans it gives to Greek banks, it would make granting conditions harder. Liquidities for Hellenic financial institutions are drying up, and without the ECB’s help, the central Bank of Greece may have to grant emergency funds to the banks, forcing it to print money itself. German Chancellor Angela Merkel stated that the door to discussions was still open, but that Alexis Tsipras must present specific proposals as soon as possible. A meeting of European leaders is planned for later on today.
At this time, the loonie is losing ground while markets and crude oil prices are stable.
