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The OFR released today its Financial Markets Monitor for June/July. The monitor says developments in Greece, a sharp equity market correction in China, and Puerto Rico’s announcement of a potential debt restructuring have driven risk sentiment in financial markets. The key market focus has been the negotiations between Greece and its official creditors to secure needed government financing. Uncertainty increased significantly in late June, when the Greek government broke off negotiations, called a referendum on the official creditors’ proposal, established capital controls, and missed a payment to the International Monetary Fund. To date, there have been only moderate spillovers to other euro area periphery markets and safe-haven assets. Developments remain fluid; a more disorderly outcome in Greece than market participants expect may test the stability of broader euro area markets.
The monitor is posted on the OFR website at:
http://financialresearch.gov/financial-markets-monitor
The OFR home page is at http://financialresearch.gov
