The Greek crisis will be in focus as the ECB mulls the beleaguered country’s access to emergency liquidity while the government auctions off 6-month bills.
Talking Points:
Euro Gains as ECB Mulls Greek Banks’ ELA Access, Athens Sells 6-mo Bills
New Zealand Dollar Slumps as Soft 1Q Jobs Data Fuels RBNZ Rate Cut Bets
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All eyes will be on Greece in European trading hours. The beleaguered country will try to raise €875 million in a six-month bill sale ahead of a scheduled payment of €1.4 billion in maturing paper on Thursday. Meanwhile, the ECB Governing Council will meet to discuss Greek banks’ continued access to Emergency Liquidity Assistance (ELA).
A jump in borrowing costs at the auction and/or a tightening of ECB requirements for tapping ECB funding may fuel fears of an imminent Greek cash crunch, weighing on the Euro. The markets seem relatively sanguine however, with the single currency broadly higher against the majors ahead of the event risk. Investors’ optimism may reflect the relatively low probability of major changes in the status quo ahead next week’s pivotal Eurogroup meeting, particularly from a central bank wanting to project an apolitical posture.
The New Zealand Dollar underperformed in overnight trade, falling as much as 1.3 percent on average against its leading counterparts. The move followed an underwhelming set of first-quarter Employment figures. The report revealed a quarterly jobs increase of 0.7 percent compared with economists’ expectations of a 0.8 percent gain. The unemployment rate printed at 5.8 percent, disappointing bets on a drop to 5.5 percent. The Kiwi’s slide tracked a drop in front-end bond yields, hinting the figures fueled RBNZ rate cut speculation.
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