Strategy Video: Greece and Eurozone Standoff Remains Top Market Concern
• The standoff between Greece and its Euro-area creditors has found little-to-no progress in compromise
• Unlike last week's special meeting on Greece, Monday's meeting requires progress as deadlines come due
• While a promising outcome is likely, the market is under-pricing a very dangerous breakdown
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A rift in the Eurozone has developed between Greece and its creditors over the maintenance of austerity at the cost of economic pain. Since the Syriza-led coalition government took the reins, Greece has maintained a stance that it would not abide by previously-agreed terms. The Euro-zone in turn has obstinately held its course that the agreement must be fulfilled. Despite multiple meetings over the past weeks, the situation has shown little-to-no progress towards compromise. The risk that the situation declines into a full-scale crisis is tangible and the severity of such a scenario is grievous. And yet, EURUSD has recovered lost ground and measures of risk remain extraordinarily low. While this situation may find its way to the path of resolution, the market's exposure is worrisome. We discuss Greece, the Euro and market positioning in the weekend Strategy Video.
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