ForexLive Asian Wrap Tue. 27Nov2012: Greek Debt Deal Done

Author: Eamonn Sheridan | Category: News

Leaks of a deal on Greek debt and getting the next tranches of aid to the country started at 2205GMT, with further smaller leaks embellishing some details coming out until the press conference at 0028GMT.
In brief:

  • Greece will receive up to 43.7 billion euros in stages as it fulfills the conditions
  • First release of a major aid installment on December 13
  • The IMF’s share, will be paid out once a buy-back of Greek debt has occurred inthe coming weeks
  • Cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.
  • Hand back of 11 billion euros in profits  from ECB purchases of discounted Greek government bonds in the secondary market
  • Reduce interest on already extended bilateral loans from the current 150 basis points above financing costs to 50 bps  once Greece reaches 4.5% primary surplus (no, I’m not making this up …)
  • Finance Greece to buy back its own bonds at a target cost of around 35 cents in the euro
  • Aim is to to reduce Greek debt by 40 billion euros, cutting it to 124 percent of GDP by 2020
  • More details here at the full statement


  • The EUR/USD got as high as 1.3007 on the initial news, settling back around 1.2980 (in a tight range, but in thinnish, volatile activity).
  • The EUR/USD then got up to 1.3009 during the press conference, again settling lower (around 1.2990) before falling back to around 1.2980
  • Cable got in on the action, as did the AUD (and, to some extent the NZD), registering highs of; Cable 1.6045, AUD 1.0490, NZD 0.8239.
  • USD/CAD got to 0.9923 (there was no further poaching of government officials, so the CAD didn’t get extra active).

After the Eurogroup press conference activity subsided.

There was some activity in the rest of the world:

  • New Zealand October Trade Balance came in with a deficit much wider than expected of -718M (previous month revised down from -791M to -775M)
  • More price falls in Japan, Corporate Services Price Index YoY at minus 0.7 (vs. -0.5 prior)
  • South Korea tightened regulations on FX forwards in an effort to stem capital inflow 
  • Chinese Industrial Profits (YoY) were +0.5% (vs. -1.8% previously)
  • The Japanese Government was said to be considering an extra Y880B in stimulus (Kyodo news, unnamed sources)


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