Greece makes €200mn repayment
This morning it has been reported that Greece has made a €200mn scheduled loan repayment to the IMF. It is important to note that this is on time, even a fraction early. On the back of this news the EUR has strengthened across the board. As a side note, it is rumoured that the IMF has made in excess of €2.5 billion from Greek loans.
Were it not for the Greek repayment news, this morning’s headline would have focussed on the UK election and the significant uncertainty around the outcomes. The current forecast is that it is almost certain that there will be no single party majority. Perhaps more concerningly, if the Conservatives end up with the most votes there is then a 43% chance that the coalition will have to be formed by 3 or more parties. Traditionally, GBP has benefited from Conservative victories. However, given the above probabilities GBP would favour a Labour-SNP coalition, this being the most likely two party coalition and therefore the quickest route to a certain outcome; markets like certainty above all else.
Elsewhere, USD fell as the US trade deficit surged to its highest level since 2008. The impact of this on cable, GBP/USD, would have been difficult to see with the volatility that the election has brought.
In Australia, March retail sales grew more slowly than expected in part vindicating yesterday’s RBA policy rate cut to 2%. Nonetheless, the AUD continued to rally.
There are no significant data releases today, we wait with baited breath to cast our votes tomorrow morning.