Greece Conflict Effects Asia

Asian markets moved very little during Monday’s trading session.  Australian share markets lost 0.1% to 4233.50 after gaining all year, Australia is actually up over 4% for the New Year, making quiet gains. Most of the markets just seemed to drift today. Many are closed for the Lunar New Year including Shanghai, Hong Kong and Seoul.

The Nikkei rose 0.2% in a quiet trading session. Asian markets got what little life they exhibited today from the bounce in US markets on Friday.

With little in the way of economic news and data out today and the lower volume due to the holiday, the markets were lax.

All eyes and ears were waiting for news on the Greece situation. As of this morning, there has been no verifiable agreement reached between the Greek government and the IIF, representing the banks and major creditors. The original deadline to reach an agreement to avoid default was this past Friday, when no deal was reached both parties stated that they were going to continue talks over the weekend via phone. At this moment, there have been lost of conflicting reports and rumors, but no hard news on a final deal.

This morning’s deadline was set to present the final deal to the EU and ECB at their meeting today.

Reuters reported last evening “Greece and private creditors neared a debt swap deal which would prevent Athens from bankruptcy and have investors lose up to 70 percent of the loans they have given to the country. But many details were still unresolved and the plan must be approved by the International Monetary Fund and others.

Euro zone finance ministers will decide on Monday what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens.”

In Monday’s Asian session, most of the currencies including the yen, aussie and the kiwi remained in tight ranges, just sitting and waiting.

Last week we saw the euro pick up some strength and rise almost back to the all important 1.30 level, making it as high as 1.2986 before losing the battle. On Friday as investors grew weary and amongst some profits taking the euro declined and the USD picked up steam. Many investors ran for the safety of gold pushing gold up by 10.00 on the close of the week end at 1664.50.

Today we might expect statements from the EU, the ECB and the IMF but it does not look like a deal will be struck without some incentives added, perhaps a Greek default is possible.