MARKET BRIEFING – LONDON OPEN 05.08.2015
The probability that the Greece’s economy will be harmed further by the new austerity measures imposed by the creditors is real. The analysts believe that unless the debt afflicted country will receive a substantial loan relief, it will suffer permanent depression along with further deterioration of its economic health.
For example it is projected that only the increase in VAT, which was one of the measures to be accepted by the Greek government in order to receive the bailout funds, will cause the GDP decrease of more than one percent next year. This will be due to even weaker consumer spending and continuous shrinking of the economy.
In 2016, the country’s Gross domestic product is calculated to be 30% lower, than at the beginning of the crisis in 2010 and 7% so comparing to the time when Greece has joined the Eurozone in 2001.
Currently, the Greek stock market continues to decline. On Monday, when the stock exchanges opened after being closed since the end of June many stocks suffered trading suspension due to the limit down of 30% decline. The heaviest losers were the banking sector stocks, the decline of which continued on Tuesday with the results much the same.
The Greek Banks are the industry, which was particularly hard hit due to the heavy economic decline. More than 50 percent of the country’s loans are non-performing. The deposit flight was continuing at an unprecedented level during the past six months, and only ceased as the capital controls were enforced in June. This has caused huge liquidity problems and an urgent need for the recapitalisation.
The above was one of the factors, which pushed the Greek government to accept the new bailout agreement measures in order to receive 86 billion euro aid, 25 billion of which is allocated to go to the country’s banking sector.
At the moment, the negotiations with the country’s international creditors represented by the International Monetary Fund, European Commission and the European Central Bank are underway and expected to be concluded in the next two weeks.
As the new Greek finance minister Euclid Tsakalotos reported yesterday, the talks on the privatisation of the state assets, the main creditors’ demand is going smoothly, with the possibility of the final agreement to be reached even earlier.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.0981
Target 2: 1.0779
Projected range in ATR’s: 0.0101
Daily control level: 1.1125
GBPUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.5657
Target 2: 1.5465
Projected range in ATR’s: 0.0096
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Range
Target 1: 124.94
Target 2: 123.80
Projected range in ATR’s: 0.5748
Daily control level: 124.45
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9858
Target 2: 0.9704
Projected range in ATR’s: 0.0077
Daily control level: 0.9710
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3285
Target 2: 1.3095
Projected range in ATR’s: 0.0095
Daily control level: 1.2910
AUDUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 0.7367
Target 2: 0.7199
Projected range in ATR’s: 0.0084
Daily control level: 0.7260
GOLD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1104.80
Target 2: 1070.42
Projected range in ATR’s: 17.19
Daily control level: 1105.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 52.02
Target 2: 49.21
Projected range in ATR’s: 1.405
Daily control level: 55.50
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