Greek markets hit following ECB’s decision – BBH

FXStreet (Barcelona) - The Brown Brothers Harriman Team shares that Greek bonds yields have climbed sharply and stocks have fallen by around 5.5% post ECB’s decision to curtail liquidity to Greek banks.

Key Quotes

“Following the election results, Syriza came out swinging. It first pressed for debt forgiveness and then offered a sketch of a bond swap scheme. The IMF, EU, and Germany did not like it. The ECB was the bludgeon. This was not a technocrat decision. It was a discretionary political decision. It could have waited until closer to the end of the month and let elected officials work it out.”

“Like the Heisenberg's uncertainty principle, the mere fact of officially observing that it was not confident of a new agreement will be reached made that outcome more likely.”

“Greek markets have been hit. Yields are sharply higher (10-year yield up around 60 bp to 10.30% and three-year note yield is up 170 bp to 18.03%).”

“Greek stocks are off about 5.5%, led by financials, which are down around twice as much.”

“European peripheral bond yields are 1-3 bp higher, and most markets in Europe are lower.”