BNY Mellon Global Markets – Weekly Market Commentary


With Greece continuing to dominate the news, we are struck by how far the concept of brinksmanship has pushed these negotiations and equally surprised by how little investors seem to be concerned about these twists and turns. As of this writing, headlines seem supportive of a deal being hammered out before the scheduled referendum on Sunday. Since we have been here before, we will reserve analysis on any plan until it is signed, sealed and delivered. Truth be told we are skeptical of any headlines on a deal and actually feel that the end game has changed over the course of the past 6-months which will effectively force a vote this weekend. Earlier in the process, we could believe that the stakeholders were looking for an amicable solution within the confines imposed by their political constituents. However, as the negotiations dragged on and became increasingly acrimonious, we think that end goals have changed, or at least evolved for these stakeholders. It is clear that the Tsipras government has moved “all in” and anything short of a strong “No” vote this weekend would be indictment of all of its tactics over the past 6-months. From this perspective, we believe that they want and need the vote to occur and will frame the discussion in their best light leading up to the Sunday referendum. Therefore, the opportunity to vilify the creditors serves in their best interest, and we take all current headlines with a grain of salt, leading us to question the integrity of offers to return to the table and hold serious discussion.

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