The man who shocked us all last week calling the surprise Greek Referendum, the then Greek Finance Minister Yanis Varoufakis' promptly resigned this morning despite the vote coming in as a resounding ‘No’ to accepting their creditors’ reform proposals.
He actually initially announced that he would only resign should the Greek public vote ‘Yes’ thus the result and his departure leave analysts and everyone else alike even more ‘in the dark’ as to whether Athens can now strike a deal with its lenders.
Euro pairs don’t seem to know which way to go; they gapped open lower first thing then rallied hard across the board; EURUSD reaching 1.1097 nearly breaking through the 1.11 handle mid morning only to come off again falling to a low of 1.1001. EURUSD now trading close to it’s opening value last Friday at 1.1066
The German Economy Minister Sigmar Gabriel said this morning that ‘Greece must present a new offer that goes beyond its previous proposals if it wants to remain in the Euro’, adding that ‘Athens soon faced state insolvency’.
Eurozone investor confidence, however, surprisingly improved from a four-month low despite the on-going crisis talks, a survey by the think tank Sentix showed today.
The investor confidence index rose unexpectedly to 18.5 in July from 17.1 in June. It was forecast to fall to 16.
Speculation is rife that Euclid Tsakalatos, the man who had replaced Varoufakis as head of Greece's negotiation team with lenders, could become his replacement. The Greek government has said on Monday that we should know the replacement at some point today.
Noises coming out of Germany seem to be adamant that it is increasingly unlikely for Ms Merkel to give Greece a second chance now believing we are heading for an imminent Greece exit. This would be a massive humanitarian move from the ECB, however, which will see the Greek economy and its innocent public both young and old plunged into even greater chaos as they continue to feel the effects of previous failed governments.
The knock on effect of Greece’s potential exit is being felt across all markets today; risk aversion has dominated the energy & commodity markets as prices in Oil & Gold have fallen sharply,
Gold, traditionally viewed as a safe-haven by investors fell from an open of 1175 to a low of 1163, retracing back this afternoon to current levels of 1167
"Tuesday’s Eurogroup meeting is to start at 13:00 (1100 GMT) with ministers expected to hear new proposals from the Greek authorities
We should therefore know more tomorrow following this and the European Central Bank (ECB) policy makers meeting to discuss the outcome of the Sunday referendum, during which they are also deciding on the continued funding for cash-strapped Greek lenders this evening.