Speaking in a TV interview as the crisis roiled worldwide markets, Tsipras said Monday European leaders don’t have the nerve to throw Greece out of the euro as the cost to the 19-nation union would be “enormous”.
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Greece on Tuesday is slated to miss its 1.54 billion euro ($1.71 billion) payment to the worldwide Monetary Fund, and the country’s bailout program also expires the same day.
Over in Europe, the Greece story painted a completely different picture in the equity markets. Absent a complete capitulation from creditors, “Greece will default on the IMF tomorrow and emergency liquidity assistance should be withdrawn on Wednesday”, he said. “In the aggregate that’s going to keep alt of pressure on markets both internationally and domestically”, said Art Hogan, chief market strategist at Wunderlich Securities. Citigroup Inc., which coined the term “Grexit” in February 2012. All 10 of its main groups were in negative territory, with seven stocks falling for every one that gained. Trading volumes were 59 per cent greater than the 30-day average, according to data compiled by Bloomberg.
The Athens Stock Exchange was closed on Monday.
The yield on 10-year Greek bonds surged 393 basis points to 14.78 per cent, the highest since December 2012.
Following declines overseas, USA futures were sharply lower in morning trade, with the Dow futures down by about 180 points but off overnight lows of a roughly 300-point decline. A Bloomberg gauge of 20 currencies slid 0.4 per cent, the most in three weeks, with Turkey’s lira and Russia’s ruble losing at least 0.8 per cent against the dollar.
Added to that, David Madden, market commentator at IG, said while the uptick in the futures market initially appreared a short-covering after Monday’s big drop and amid the wide-scale selloff in Europe, sentiment has shifted, and a positive day on Wall Street seems to be setting up.
The S&P 500 declined more than 1 percent with only utilities advancing and materials and financials declining about 1.4 percent to lead nine sectors lower.
TUI AG sank 6.5 per cent. Thomson Airways Ltd. and First Choice Holidays Plc, owned by TUI, said over the weekend that some of its customers were victims of a terror attack in Tunisia.
Wells Fargo, down 1.9 percent, was the biggest drag on the financial index.
The Shanghai Composite Index tumbled 3.3 per cent, leaving it down 22 per cent from its peak, as signs of an exodus by leveraged investors overshadowed the central bank’s effort to revive confidence with its fourth interest-rate cut since November.
The Bloomberg Commodity Index lost 0.4 per cent, with nickel down nearly 5 per cent in London and USA crude oil sinking 2.2 per cent in a fourth day of declines.
Yields on the benchmark 10-Year Treasury dipped, reaching 2.39%, while gold prices rose 0.19% to $1,175.40 an ounce, as investors rushed into safer assets.
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The FTSE 100 fell 0.7% to 6,592, following on from yesterday’s 2% fall, as Greece and its creditors remain at loggerheads despite the former’s bailout package expiring today.
