So US stock market soared into Monday’s close on erroneous Financial Times report that Greek Finance Minister Yanis Varoufakis was conceding there would be a haircut and no write down of the debt.
The report was good enough to give the Dow a 150 point move starting at 3:30pm. No of these machinations can alter the underlying problems within the global economy.
While US markets have seen wild fluctuations the last week or so, with the Dow Jones moving over 100 points in either direction, the fact that Greece will push for a write down is the end results.
Now whether ECB officials or the rating agencies see this as a default this time is open to debate. Last go around the semantics were so skewed that the default was not seen as a credit event triggering massive derivative payouts.
This is the only aspect that US markets care about. While many Wall St firms disavow any exposure to Greek debt or the derivatives attached to it, someone is holding plenty of paper in an effort to get better yield thinking — perhaps wisely — that any default would be worked out prior to triggering massive payouts.
Follow the ones that protest too much for a clue.
On the currency war front Australia cut its benchmark interest rate to a record low of 2.25% on Tuesday leading to a 1.5% cheapening of its dollar vs the greenback.