Safe haven market shines amid Greek crisis

Safe haven market shines as Greek crisis has taken an unexpected and dangerous turn over the weekend.

Greek people rejected the bailout that was on offer from European creditors. Negotiation is now in final lap, where a failure might mean disorderly exit of Greece, which may or may not result in massive rout.

Since it stands impossible to predict, how the tide will actually turn and what might a fat tailed event like Greek exit from Euro zone actually means for global market, investors are flocking to the safety of safe havens.

Bond market -

Bond market is the biggest gainer, with US treasuries, German bund, UK gilt all rallying pushing the yields lower while Greek 10 year yield creeps on.

US 2 year yield is currently trading at 0.57%., down from 0.69% few days back. US 10 year is at 2.22%, down 20 bps this month so far.

German 2 year has taken a dive into negative, currently at -0.26%. German 10 year has fallen from 0.93% to current 0.74% in two weeks.

UK 2 year yield is currently trading at 0.50%, from 0.68% about 10 days back. UK 10 year yield has fallen almost 43 basis points to trade at 1.85%.

Yen -

Yen has strengthen against all of its major trading counterparts, even against dollar as safe haven bids keep it well bid. Reversing carry trades might be another reason for Yen strength.

Yen is currently trading at 122.4 against dollar.

Gold -

Gold remains the only safe haven that has not gained from ongoing Greek crisis. Sellers are continuously emerging at rallies, which suggests that Gold might fall further and beyond $1100/ troy ounce. Currently trading at $1159 per troy ounce.