Risk assets and the EUR have been broadly stable in Asian hours regardless of intensifying uncertainty as related to Greece. It appears that market tensions are unlikely to rise more considerably ahead of Sunday’s referendum as a “yes” vote still seems more likely, irrespective of Greek PM Tsipras recommending to vote against creditors’ bailout terms.
Even if not meant to be, the upcoming referendum may be regarded as a way to express opinion on staying part of the Eurozone. Considering that most recent polls clearly showed a preference of staying within the Eurozone and as this week’s painful introduction of capital controls may support such prospects even further, such a view may gain more traction in the days to come.
Although all of the above should prevent risk aversion from rising more considerably, we remain of the view that EUR rallies should be sold. Any correction risk on the back of a more positive Greece-related development should stay limited given the ECB’s aggressive policy stance. When it comes to Greece the main focus turns to today’s loan repayment to the IMF. However, even a missed public sector repayment will not result in a default.
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