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Greece inches towards normality

Published Tuesday, July 21st, 2015

Greece took a significant step towards normality yesterday after its stricken lenders reopened to long queues as its banking sector sputtered back to life following a three-week shutdown. The opening may however have been more symbolic than anything else with banking services still very much limited although some comfort would have been taken from the mild relaxation of capital controls. Fears that there would be a rush to take money out with confidence in Greek banks badly damaged proved unfounded and officials instead encouraged savers to deposit funds to help boost liquidity.

The morale-boosting effect of Greek banks reopening their doors was soon put to test as a sales tax rate imposed on Athens as part of its bailout deal took effect. Moreover, anxiety may tick higher ahead of tomorrow’s vote by Greece’s parliament on a second batch of measures demanded by its creditors where pro-European opposition support will once again be relied upon by Alexis Tsipras. Nevertheless, the disbursement of a €7 billion bridging loan meant that Greece was able to make a bond repayment to the ECB and clear its arrears with the IMF which duly boosted sentiment. Easing worries over Greece’s financial woes lifted risk appetite and sent equities across the bloc higher while a slew of well-received US corporate earnings reports kept stocks on Wall Street at multi-week highs and the dollar pinned to a three-month peak.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.