Talking Points:
• An emergency Euro-area leaders summit is scheduled Monday to discuss the growing risk around Greece
• Chinese equities have plunged this past week, be aware of contagious risk trends next week
• Interest rate expectations for the US and UK can quickly reclaim their influence over volatility
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Lingering financial threats in the simmering Greek debt standoff and wavering systemic risk trends may come to a head in the week ahead. After yet another meeting between officials from Greece and its creditors fell through, we have seen liquidity issues catch up to the political scrum. The ECB seems to have plugged the hole to prevent a crisis over the weekend, but a lasting resolution is desperately needed - perhaps at Monday's emergency EU leaders summit. Euro troubles may prove a motivator for broader risk trends, but speculative appetite is already facing trouble with the high-flying Shanghai Composite dropping more than 13 percent this past week - its worst hit in seven years. Risk appetite is infectious - fear more so than greed - and the environment is ripe for deleveraging excess. Meanwhile, US and UK interest rate expectations can readily recharge the FX market's most effective trend driver: monetary policy divergences. There is a lot ahead, and we cover the key themes in this weekend Trading Video.
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