Comments from JP Morgan strategists on Greece:
- Say the chances of Greece leaving the eurozone are low
- But, even if they do “the region has come far enough since the heights of the crisis to withstand a Greek euro exit intact”
- A Grexit would be “a shock to confidence and growth”, but “we would not expect others to follow a Greek euro exit”
On the EUR/USD:
- “Greece’s hypothetical EMU exit with firewalls implies a decline to $1.05, assuming the ECB balance sheet might expand to E4 trillion to stem contagion and the Fed is tightening at that time”
On bonds:
- “Intra-EMU spreads to widen significantly in the period around the Greek exit but no loss of market access for the large peripheral countries”