Is Greece Greasing the Gears for a Deal With Its European Creditors?

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Is Greece greasing the gears for a deal with its European creditors?
That’s what markets started betting on today, after Prime Minister Alexis Tsipras sidelined his controversial Finance Minister Yanis Varoufakis. Specifically, he boosted the negotiating role of a deputy foreign minister and changed the responsibilities of two other Greek representatives.

The moves are a clear attempt to placate European officials fed up with the fiery and controversial Varoufakis. And they had the desired effect — sending Greek stocks and bonds sharply higher on the day. That buying spilled over into the euro currency and U.S. stocks, both of which advanced sharply.
What’s the problem with Varoufakis? In the words of euro-zone finance ministers, he’s a “time-waster, gambler, and amateur,” according to media reports. Talks in Latvia late last week devolved into a finger-pointing session, with Varoufakis taking the brunt of Europe’s anger.

Greece needs to come up with 1.5 billion euros for pensioners and employees this week.

It’s not like Greece has time to fiddle while Athens’ finances burn. The country has to pay 1.5 billion euros to pensioners and employees this week, and it needs to cough up another 200 million euros to the International Monetary Fund (IMF) in early May.
Plus, signs are emerging that Greece’s hard-line negotiating stance is losing favor with the country’s citizens. Two new polls in Greece suggest they want Tsipras to strike a more conciliatory tone to get a deal done and keep Greece in the euro currency union.
So what does this mean for investors like you? Well, the various negative headlines out of Europe have been having less and less of an impact on world markets over time. That’s because policymakers have taken several steps over the past couple of years to lessen the fallout from a potential “Grexit.”
But I think POSITIVE news could remove the final obstacle to a major, countertrend move higher in the euro, and a corresponding, sharp correction lower for the dollar!
Look, I’ve already highlighted how several peripheral currencies are rallying against the buck. I told you late last week how even the British pound and Canadian dollar have joined in. Then overnight, the Taiwanese dollar just surged by the most in 15 years against the dollar overnight, while the Korean won climbed to a three-month high.

“Keep a close eye on the latest news out of Greece, and be prepared to react if events pan out!”

If the euro can recapture the 1.10 level — and especially 1.12 — we’re going to see the dollar longs really start to panic. That, in turn, would be yet another positive force for everything from oil prices to emerging market shares and bonds. So keep a close eye on the latest news out of Greece, and be prepared to react if events pan out!
In the meantime, it’s your turn to speak out! Will Varoufakis’ exit help grease the wheels of any negotiation? Or is it too little, too late? What impact do you think this will have on the euro currency or the U.S. dollar? And how are you adjusting your investing strategy, if at all, to react? 

 Source:
 Mike Larson
 moneyandmarkets