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Greek yields rise to 28%

Published Tuesday, April 21st, 2015

The lifting of the short selling ban and limits on margin financing imposed by the Chinese regulator after the Asian stock market close on Friday weighed on Hong Kong and Shanghai shares yesterday. However, the cutting back of reserve requirements by the Chinese central bank lifted equity values in Europe and the US, recovering Friday’s losses.

European stock markets appear to be quite blasé about an approaching Greek default. Either they think it will not happen or they no longer fear the repercussions. It would come as no surprise if European stock markets moved higher if Greece exits on the basis that it is a problem child disposed of and as a lesson to others. The lack of support for Greece from the other peripherals is revealing. The yield on Greek bonds due in 2017 hit a record high of 28% yesterday.

There are still plenty of twists and turns to come, not least the possibility of funding from Russia or Syriza calling a prompt referendum. Brussels is never happy when the people are consulted about whether they wish to remain in the eurozone or the EU. Eurozone finance ministers meet on Friday to discuss the mess but before that flash PMIs appear on Thursday which are expected to be encouraging with the eurozone composite forecast to come in at 54.4, up from 54.0 in March.

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Posted by David Hufton