The failure to make progress in Greek debt negotiations elevates the risk of a default on the €3.5bn that is owed to the ECB on 20 July.
A default on that bond would almost certainly lead to the emergency liquidity assistance (ELA) being switched off and throw Greek banks into an untenable position of ‘Grimbo’.
Gold has surprisingly not reacted to the events but that could change as worst-case scenarios crystalize. Oil inflows reach the highest for 14 weeks, with ETF securities long oil ETPs receiving $49.3m of inflows last week.
Agricultural commodities have clearly been outperformers in the past week, and as the strengthening El Niño weather pattern changes growing conditions, we believe agricultural commodities will continue to offer investors strong opportunities.
Nitesh Shah is associate director Research at ETF Securities