MARKET BRIEFING – LONDON OPEN 03.08.2015
Today Greece is reopening its stock markets, which were closed since the end of the June. This will be one more step towards normalizing the struggling country’s economy.
Immediate heavy losses are expected, with some analysts projecting the draw-down to reach as much as 20 percent.
The resumption of trading begins as the deal for the bailout extension was made between Greek government and its international creditors, comprised of the European Central Bank, the European Commission and the International Monetary Fund.
The bridge loan of 7 billion euro was arranged for the cash-strapped country in order to repay the delayed instalment to the IMF as well as the Greek bonds held by the ECB.
The deal will promote the further measures to ensure the country’s debt is sustainable. These will be stringent reforms in the pensions system and taxes, as well as other budget’s austerity measures.
The operation of the Greek stock exchange was suspended since June 29, together with the imposition on the capital controls, to prevent the heavy outflow of the funds from the country, threatening the Greece banking system’s collapse.
The stocks are expected to be down between 19 and 22 percent, which is partly estimated based on the Greek assets traded in the United States.
In addition, the traders concern about the negotiations on the new bailout could add a further pressure on the stocks of the struggling EU member. The fears that the negotiations might fail and the Greece economy will be once more left with the shortage of cash does not add any optimism to the short-term outlook for the trading of the Greek shares.
We should keep in mind that banking sector comprises about 20% of the Athens stock exchange, making therefore making the index highly vulnerable to any negative events regarding the future bailout agreement.
Furthermore, the recent bank closure and restrictions on the cash withdrawals and money transfers, have been a weighty toll on the operations of the Greek companies, many of which saw the sales decline to more than a quarter.
The overall economic prospects of Greece are neither on the bright side. It is projected that the country’s economy will decline between 2 to 4 percent this year, which could cause the country to slide deeper into recession.
EURUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.1075
Target 2: 1.0867
Projected range in ATR’s: 0.0104
Daily control level: 1.1125
GBPUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.5728
Target 2: 1.5536
Projected range in ATR’s: 0.0096
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Range
Target 1: 124.47
Target 2: 123.29
Projected range in ATR’s: 0.5913
Daily control level: 124.45
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9747
Target 2: 0.9561
Projected range in ATR’s: 0.0085
Daily control level: 0.9710
USDCAD
The intraday technical outlook
Trend 1 hour: UpA
Target 1: 1.3193
Target 2: 1.2983
Projected range in ATR’s: 0.0085
Daily control level: 1.2910
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7403
Target 2: 0.7233
Projected range in ATR’s: 0.0085
Daily control level: 0.7260
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1112.68
Target 2: 1078.68
Projected range in ATR’s: 17.00
Daily control level: 1105.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 53.56
Target 2: 50.80
Projected range in ATR’s: 1.383
Daily control level: 55.50
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