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Bad Times For Greece, China and Russia

Bad Times For Greece, China and Russia

Volatility isn’t always received gladly in the markets, and at the moment the risk sentiment has been firmly switched to off and as often happens, investors flock to the safe haven that is the US Dollar.

In China, the government set new restrictions on collateral for short-term loans, triggering fears that the economy is slowing at a much faster rate than initially thought.

In Greece, we are seeing nervousness not seen since the EU bailout. The shock move to bring forward the Presidential vote could lead to early elections if PM Samaras’ candidate is not chosen. The issue with this is that Samaras’ party has a slim majority and this could open the door for the anti-austerity party to win and see a return to the financial mess that enveloped the country in 2012.

Things aren’t going too great in Russia either as we are expecting the Central Bank to raise interest rates from 9.5% to 10%. The economy is suffering due to falling oil prices and sanctions over the Ukraine crisis. The Ruble has devalued by 39% this year and it is up to policymakers to see how they can arrest this slide as it implies that inflation will continue to rise and pose a major risk to Russia’s financial stability.

News out today includes: Trade Balance from the UK, US mortgage applications and the interest rate decision from New Zealand.

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