The world key indices across the world have nosedived on fear Greece will again miss its Tuesday deadline when it has to repay its €1.6 billion debt to the IMF. This could cause a default and push the country out of the Eurozone.
Greek debt
crisis LIVE UPDATES
DAX of Germany has
suffered the most, falling 4.17 percent this morning. In Asia,
where trading finished by the time of publication Shanghai
Composite showed the worst result, closing at 3.34 percent
lower.
READ MORE: Greece closes banks, imposes
capital controls
The Euro is also losing
momentum against the US dollar, having gone down 0.74 percent on
Monday as of 10:42 am MSK. By 06:59 GMT the euro was trading at
$1.1089, still down 0.7 percent on the day but well clear of a
four-week low at $1.0953 touched in Asian trading.
Morning Note: 1. Stoxx50 futures plunge. 2. EURUSD dives. 3.
Spanish + Italian yields surge pic.twitter.com/re6tpzXGAJ
— Jonathan Ferro (@FerroTV) June
29, 2015
In Greece, the banks will remain closed for a week and cash
withdrawals will be limited at €60 a day, as the government said
it would hold a referendum this Sunday to let the people decide
what to do with Athens’ multibillion-euro debt.
IMF chief Christine Lagarde told the BBC on Saturday that the
planned referendum on the terms of any new bailout plan will be
invalid, as on Tuesday the current program expires.
The Greeks would be voting on proposals that no longer exist, she
said.
The ECB refused to expand its emergency liquidity assistance
(ELA). As of June 23, the ELA program had lent Greek banks about €89 billion.
The EU Tax Commissioner Pierre Moscovici hasn’t lost hope of
reaching an eleventh hour deal.
To those who wonder what’s next, 1. #Greece
should stay in euro;2.The door is still open for negotiations
on latest @EU_Commission
proposals
— Pierre Moscovici (@pierremoscovici)
June 28, 2015
London-based market
strategist Michael Ingram at BGC Partners told Bloomberg that a
Greek default is almost inevitable.
“Without a complete capitulation from the troika, Greece will
default on the IMF tomorrow and emergency liquidity assistance
should be withdrawn on Wednesday. I can’t see anyone stepping in
before Wednesday ahead of an ELA withdrawal,” he said.
Greece is due to repay €1.6 billion to the IMF by June 30. If it
is unable to do so, the country could technically default.