18 May 2015 by lberuti
The interest rate market was much quieter today, and the credit market had to look elsewhere for direction. So, surprise, surprise, it turned to… Greece! As no material progress had been made during the week-end, the tone was defensive throughout most of the session, and European indices saw their risk premia increase across the board, even though the move was not very aggressive. Eventually, most of the widening was erased in the second part of the afternoon, when the rumour had that the EU was willing to compromise for a Greek deal, and that €5bln could be released rapidly once lowered primary surplus requirements would be agreed. As it turned out, the story was actually coming from a Greek newspaper, and a spokesman for the EU said they were not aware of the plan. The market is really feeding on scraps at the moment, and the moves are tamed, as shown be the alarmingly pale colors of the above grapple.