[Rooters] June 28 - U.S. equity futures dropped sharply and bond futures rallied at the beginning of trading Sunday, as the chances that Greece will default on its debt and exit the euro zone grew.
Greece will introduce capital controls and keep its banks closed on Monday after international creditors refused to extend the country's bailout and savers queued to withdraw cash.
"That is going to have a real big impact on markets and that will generate increased volatility," said Ian Stannard, European head of FX strategy at Morgan Stanley in London.
The euro fell nearly 2 U.S. cents to a one-month low in early Asia Pacific trade and European markets were expected to be volatile when those markets open later.
The fear of contagion produced a sharp move into safe-haven government debt. U.S. 10-year Treasury futures rose 1 27/32 in active trading early.
The fear of 'contagion' is very real. Many of the Euro-Shengen member states are quite vulnerable. 'Safe-haven government debt' is a certainly a stupefying misnomer. |