The EUR continues to trade relatively stable, notwithstanding the continued uncertainty pertaining to Greece where this sort of stability owes in part to resurgent strength in equity market inflows, notes BNP Paribas.
"On the policy front, Eurogroup finance ministers gather in Brussels today ahead of the EU summit Thursday. Comments from various finance ministers ahead of the meeting have taken a hard line, warning that bridge financing will not be provided and that Greece will need to agree to a program in order to receive funding," BNPP adds.
"Failure of the parties to find common ground or express optimism on progress could add to market nervousness," BNPP argues.
BNP continues to hold EUR short exposure and favors funding risk trades via the EUR.
"We would not add to EUR shorts on negative Greece headlines nor would we cover shorts on news of successful negotiations – particularly as there is little sign of contagion in peripheral yields as yet," BNPP advises.
