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Daily Forex Fundamentals |
Written by Swissquote Bank SA |
Feb 21 12 09:20 GMT
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Eurozone Finance Ministers Reach Greece Deal
Market Brief
Risk firmed as the much anticipated Greek second bailout package was passed by the Eurogroup finance ministers. Dow Jones reported that financing on the deal would total 130bn euro and that Debt to GDP would wall to 121% by 2020. In addition, the news wires reported that private creditors would accept a deeper haircut, expected to be over 53%. On the news of the Eurogroup and PSI agreement, EURUSD jumped to 1.3290 while AUDUSD climbed to 1.0755, however there was little follow through in either pair after the initial reaction.
In other news, the RBA minutes came in slightly more dovish than anticipated. The RBA stated that they saw room for further easing at the February meeting, stating that the inflation outlook gave room to cut, if demand weakens. Compared to the movement from Europe, the reaction to the minutes was muted. AUD OIS has decreased in recent weeks lowering the expectation for a rate cut. Currently there is only 8bp price in for the next meeting and 25bp for the May meeting. Should we get some soft reads in activity, watch for the curve to shift sharply higher. The key events for today will be the EcoFin meeting and French bond auction. |
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