Rest On Sabbath For Next Week's Rumble

A great weekend in time for us to see more stars next week as folks rejoice on  the SCOTUS ruling on same sex marriage.

I have been speaking to various people and will share their thoughts on the  new developments we have had in the past 24 hours.

What’s on the menu ?

CHINA

China’s rate cut just when we all thought they did enough last week with their efforts in market development and fund injection through repos.

China Cuts One-Year Deposit Rate and Lending Rate by 25 bp and lowered reserve-requirements after a stock rally reversed course and local-government bond sales drained liquidity. http://in.reuters.com/article/2015/06/27/china-economy-rates-idINKBN0P70BV20150627

My Friends’s Responses  :

“I suspect it’s losing its power.. After a while, markets also know it’s moot.”
>> obviously not long

“Aiyoh, really ah. These Chinese are going nuts. Next chance no matter what, I’m getting out. ”
>> a sincere response

“Who cares about China rate cut ? Greece is the big story.”
>> no positions in China

“So Monday up 10%?”
>> a hopeful long but wishes he had bought more last week

“That’s China for you. No reason for them to inflate the market then let it crash which will waste all their efforts.”
>> SKEPTIC

“Woot. Wow. Yay. I’m richer. I sold puts on CSI on Friday pm.”
>> the rich get richer !!

The Gre-ferendum

Just when Reuters reported on Friday that Greece Equity Funds continues to attract fresh monies and flows into Greece Equity Funds were on track to hit a 17-week high, Greece’s lawmakers approve govt’s proposal to hold referendum on agreement with creditors on 5 July.

EU Leaders Reactions

*SCHAEUBLE: GREEKS QUITTING TALKS IS `CONFUSING, DEPRESSING’
*LAGARDE: IMF CAN’T DISBURSE TO GREECE IF JUNE 30 PAYMENT MISSED
*LAGARDE SAYS PROPOSALS WILL BE NO LONGER VALID BY REFERENDUM
*IRELAND’S NOONAN: I HAVE SYMPATHY FOR THE GREEK PEOPLE, THE CRISIS HAS COMMENCED
Italy’s Padoan Says ‘At This Point We Have a Crisis Situation’
Finland’s Stubb Says Doesn’t See Greece Contagion Risk
*SCHELLING SAYS `THE GREEK GOVERNMENT VERY CARELESSLY ACTED’
*STUBB: `WE ARE NOT SPECULATING ABOUT GREXIT’
*DIJSSELBLOEM: SAYS GREEK DECISION TO END TALKS `UNTIMELY’
* Luxembourg’s Gramegna Says on Greece: ‘Nothing Is Left on the Table’
* France’s Sapin Says Greece’s Right to a Referendum Must Be Respected

It is a mess !

My Friends’ Responses :

“I think bibi Greece. Creditors won’t extend 5 days.”
>> No position

“EUR collapse ? I still long !”
>> Genuine position

“Don’t know how to analyse. Glad I am not in a bank now and have to say something smart on Monday morning.”
>> Do not care

“Monday we’re going to see a violent reaction. Big time. Sell Eurostoxx, Nikkei, whatever. But don’t touch EUR because a lot of positions are Long Eurostoxx /bonds vs Short EUR. Buy USD/Asia, USDMYR implied spot above 3.80.”
>> RARING  TO GO TO WORK

Inverse relationship between Dax Index and EURUSD

Inverse relationship between Dax Index and EURUSD

 

“EUR/USD might drop like 1-2 big fig … $/JPY might come off 50-100pips? Eminis is first to open & perhaps drop to 2062?”
>> PUNTER HEDGE FUND !!

 

Greece versus China versus SCOTUS ?

I personally think that China is the bigger problem after Greece. Like another friend said “Greece is 2% of EU. And banks have had 5 years to insulate and reduce Greek risk. So tomorrow really got big reaction ?”

Yes, I said, traders, speculators and punters all pouring in.

Another friend : “I like what Greece said. It’s the EU’s fault to have given us the first bail out in 2011 when it was obvious we could not pay. They should have just written off 70% (instead of 53.5%) and we would not be in this trouble.”

Well, I know quite a few people who had made a bit on money on the bonds then and there is a high chance that those bonds are going to collapse into the week.

greek 20y bonds

So rest well and a Happy Sabbath to all !!