The main currency pair continues falling slowly; the market is pretty cautious.
The EUR/USD pair is still being sold a bit on Tuesday; it has been falling for four trading sessions in a row without any pauses; but bears’ activities aren’t very significant in order to give rise to concern. The current quote for the instrument is 1.1144.
Yesterday, the market’s attention was focused on Greece, which was pretty much forgotten by everybody for a while. The country’s Minister of Finance, Euclid Tsakalotos, stated that the European Central Bank should include Greek bonds into the QE program. If it happens, Greece will return to the debt market and may attract financing without any supporting programs.
And here’s the most interesting part. Earlier, the ECB said that it wasn’t going to include Greece into the program without support from the International Monetary Fund. However, the International Monetary Fund lays the blame on European countries, which will never agree to the Greek loan restructuring. And without it, Greece won’t be allowed to enter the QE.
Greece and its debts has been a really “neverending” topic, but the situation improved as much as it could in the recent years. Athens thinks that they can “throw” their toxic bonds at the ECB and attract fresh financial flows on the bond market, but it’s very unlikely to be true. The risk level will increase significantly and result in another “bubble” on the bond market. Profitability of the Greek 10-year bonds is now estimated at 5.99%, which is very good. Any reading that is higher than 7% implies higher risks.
The daily statistics from the Eurozone was pretty neutral. The Preliminary GDP in France added 0.5% q/q in the first quarter of 2017, which is a bit better than expected. The German Import Prices lost 0.1% m/m in April, although the indicator was expected to add 0.2% m/m. The Inflation Rate in Spain expanded by 1.% y/y against expectations of 2.1% y/y. However, these numbers barely made investors respond.
RoboForex Analytical Department