Reply #8

In the discussion thread: Weekend Economists View the Trojan Horse June 15-17, 2012 [View all]

Fri Jun 15, 2012, 07:58 PM

Demeter (65,483 posts)

8. BofA: Here's What The Markets Will Look Like After Sunday's Greek Elections

http://www.businessinsider.com/bofa-stocks-bonds-euro-gold-rates-greek-elections-2012-6?op=1

Bank of America's top strategists and economists put together forecasts on the prices for stocks, bonds, commodities, and currencies depending on how the Greek elections shape up on Sunday night.

The three scenarios they examine for each asset class include:

A base case (the highest probability scenario) in which Greek voters elect parties that can form a "pro-EU" government and there are no surprise policy responses from the European Union or the European Central Bank.
A bull case (the lowest probability scenario) in which a "pro-EU" government is not forthcoming and, as a result, the EU and ECB are forced to step in with bold policies that trigger a risk rally.
A bear case (which BofA assigns a "low to medium probability") in which a "pro-EU" government is not formed and the ECB and EU don't step in to limit the fallout.

BofA breaks down what each asset class will look like in each of these three scenarios...

10-yr US Treasury Yield

Base Case: 1.75 percent

Bull Case: 2.10 percent

Bear Case: 1.3 percent

Commentary: BofA notes that in the base and bull cases, we still have the fiscal cliff to deal with in the United States, which will be an important factor for Treasury yields. However, the bear case assumes the safe haven flows we've grown accustomed to lately and more QE from the Fed, which will floor rates.

Source: Bank of America Merrill Lynch

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124 replies	Author	Time	Post
Weekend Economists View the Trojan Horse June 15-17, 2012 [View all]	Demeter	Jun 2012	OP
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BofA: Here's What The Markets Will Look Like After Sunday's Greek Elections	Demeter	Jun 2012	#8
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+++	DemReadingDU	Jun 2012	#53
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