By Chris Becker
Its been a wild ride on risk markets overnight as the “inconsequential little Mediterrean economy” wreaks havoc on confidence in the global financial system. Its down to the wire on the last day of the financial year and its seems Grexit is all but baked in. The run to safety continued on bond markets, with US Treasuries, German bunds and UK gilts bid up extremely strongly, while the contagion from Greece extended to Italian and Spanish bonds which were hammered.
On the economic data front, the slide in official German CPI (which matters more to the ECB than the millions unemployed across Southern Mediterrean “member” State) continued into near deflation territory while US pending home sales were robust they were a little less than expected.