We’ve gotten indications that the loans from the EU to Greece will come at between 5-6%. This is a moderate savings for Greece, but still a significant burden as falling revenues offset higher tax rates and spending cuts.
The knee-jerk reaction to the bailout will probably boost EUR/USD in the early going, but as always, the devil is in the details.
The larger the IMF roles, the more negatively the market will receive the package. Volatility is expected, if nothing else. Trendline resistance dating back to early December lies just above the Friday close. Odds are it won’t be able to contain the initial surge.
