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Greece Takes Global Markets Lower

By Matthew Kerkhoff

 

The focus right now is unfortunately on Greece. If you haven’t been following the latest developments, negotiations once again broke down over the weekend. Eurozone creditors rejected an extension while Greece ordered a bank shutdown and imposed capital controls. Greece is expected to default on a $1.73 billion payment the IMF on Tuesday. The news triggered stock price declines around the globe and a flurry of safe-haven buying.

 

Elsewhere, China’s central bank took extraordinary measures over the weekend to stem falling stock prices. The People’s Bank of China (PBOC) cut interest rates and at the same time, reduced the reserve requirement for some banks. This multi-pronged easing approach had not been seen since the depths of the financial crisis.

 

The move did little to stem falling stock prices, which lost an additional 3.3% today. The Shanghai Composite Index is now down more than 20% from its previous highs, the typical threshold ... Log in or subscribe to continue reading.


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