The market advanced further Tuesday on hopes the International Monetary Fund will earn more money and as Greece resume discussion with private creditors to get them to agree to reduce the value of their holdings of Greek debt.
After the breakdown of talks last Friday, investors remain nervous about what may happen, even though sentiment has shored up a little by comments made late Tuesday of Christine Lagarde, the International Monetary Fund managing director, Washington DC-based institutions that are looking for ways to increase the firepower to cope with financial, part of the debt crisis in Europe.
If the IMF has the resources the Government increase the boost their contributions, then it will have more money available to potentially help Europe in the face of adversities that debt.
“More resources mean more liquidity which I think is good for the price of assets in the short term, or at least reduce the threat of systemic risk,” said Neil MacKinnon, global macro strategies at VTB Capital.
The European debt crisis begins in Greece for two years and investors will want to see if the State can negotiate an agreement with its creditors that will relieve the crushing debt burden.