Skandinaviska Enskilda Banken - intra-day outlook for EURUSD, USDJPY and USDCAD

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Press review

Sergey Golubev, 2015.07.01 18:26

Credit Suisse - A “Yes” victory at the 5 July referendum would allow markets to refocus on policy divergence, with negative implications for EUR (based on efxnews article)

"The breakdown in negotiations between the Greek government and its international creditors over the weekend has suddenly cast the possibility of an imminent Greek default in the spotlight, and in the hands of the people of Greece, as they prepare to vote on the extension of the (now expired) bailout program on Sunday 5 July.

Several days into this new chapter of the Euro peripheral saga, and following a missed IMF payment by Greece, markets appear to believe that the likelihood of a systemic outcome is low.

While we do not necessarily disagree with this view, we favor a cautious approach to positioning. Specifically, we see a distinct possibility that conditions of broad uncertainty might persist in the event of a victory of the “yes” vote on Sunday. 

A “Yes” victory at the 5 July referendum would allow markets to refocus on policy divergence, with negative implications for EUR. In the meanwhile, both the likelihood of a potentially systemic event and overall market uncertainty have increased.  

A victory of the “Yes” camp would cause the former to subside, but could have a less than proportionate impact on the latter, in our view.  The prospect of lingering uncertainty would keep demand for "safe haven" currencies supported, especially USD and GBP."