• My initial reaction was that any default by Greece might swing the debate in front of the German constitutional court in favour of the anti-bailout lobby
  • The French plan for rolling over bank debt might no longer be needed
  • Like many before them, accepting that they cannot repay all their debt and going into default might be the only viable long-term solution open to Greece
  • One thing for sure, it gives rise to a period of uncertainty

The market will flip-flop from EUR-bearish to EUR-neutral but surely any talk of a default must be short-term bearish for many of the EUR crosses with mainstream pairs like EUR/CHF leading the way but also slightly more exotic options like EUR/NZD and EUR/CAD having an impact. It might well be a case of sell the rumour buy the fact but we can definitely expect increased volatility.