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Greece misses IMF payment

Published Friday, June 5th, 2015

The game of brinkmanship between Greece and its creditors was on full display yesterday after the heavily-indebted nation reneged on an earlier promise and announced that it would miss today’s €300 million loan repayment. The seemingly politically-motivated decision to bundle this month’s IMF payments into a one-off remittance scheduled for the end of June came as proposals from Athens and its creditors were leaked. They revealed that although significant differences remain both sides were clearly committed to reaching a final agreement.

News of Greece’s delay tactics came too late for the region’s bourses but ongoing debt uncertainties and initial euro strength ensured that European stocks lost value in choppy trading. Sovereign-debt markets were once again under the cosh with 10-Bund yields rising sharply to just below 1% before easing to end the day lower. These moves were mirrored by equivalent Treasury yields which see-sawed before closing the session on a softer note as traders absorbed dovish comments from the IMF in which it warned the Fed against a premature lift off in rates. The support offered by calls from the IMF to wait until next year before hiking interest rates to US implied borrowing costs may however be undone by a strong showing in today’s non-farm jobs report where forecasts are for a solid 225,000 net additions in May.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.