European equities are expected to open higher Wednesday, despite Greece on Tuesday becoming the first advanced economy to effectively default on a loan with the International Monetary Fund (IMF).
The move was widely expected following the collapse of talks at the weekend between Greece and its international lenders on reforms. Had the reforms talks succeeded, Greece could have received a last tranche of bailout aid with which to pay its older debts.
Instead, Greek Prime Minister Alexis Tsipras surprised lenders at the weekend by calling a snap referendum on Greece’s bailout program and austerity measures. The investors remained hopeful that Greek voters will accept the terms of the rescue program.
The Eurogroup of euro zone finance ministers will hold a new conference call on Greece at 10:30 London time on Wednesday, its chairman Jeroen Dijsselbloem said on Tuesday. Crucially too for Greece, the European Central Bank is expected to review its emergency liquidity assistance (ELA) for Greek banks.
The price of gold fell on Tuesday as the euro fell. The effects of the Greek crisis to be weak in the US and insufficient to cause the Federal Reserve to deviate from its intention to increase the interest rate.