Daily Forex Brief | Greece sets course for default

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Daily Forex Brief London: Wednesday 2nd November 2011
Greece sets course for default Tuesday was the day that this crisis became too big for the EU to handle. By calling a referendum on last week's rescue deal for Greece (the cabinet approved last night), Greece is putting itself onto a path of forced default, which could even happen before the referendum (see below for the numbers). It's worth noting that the last referendum in Greece was in 1974 (on the abolition of the monarchy) and there were no referendums on EU or euro membership. The price action in bonds yesterday was extremely instructive. UK gilts railed more than 20bp, German bonds by 25bp. French yields were down, as were Dutch, but Belgian, Italian and Spanish were all higher. Italy's premium over Germany reached a new record at over 440bp, Right now, the focus falls on the confidence vote in the Greek parliament at the end of the week and the gathering of G20 leaders in France, but events are unfolding too fast for the G20 to be able to save the day.
Also in today's Daily Forex Brief: The Greek numbers Euro-woes aid the pound MoF spends big to stop yen gains Read more...
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