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Fasdal: Why the risk of contagion from Greece could increase

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Another day, another meeting over Greece. Deadlines have come and gone but everyone has marked 30th June, the day the Greek bailout expires, as one that can't be missed.

Saxo's Simon Fasdal says so far the market appears to have priced in the possibility of a default, because it believes an agreement will eventually be reached. But he says there are other factors at play including higher bond yields and a stronger Euro which are having a negative impact on equities.

The risk of contagion in Southern Europe has so far been low but Fasdal warns that if Greek negotiations are interrupted it could easily spill over into Spain, Portugal and Italy. He says the market believes that the ECB's QE programme is acting as a cushion and the central bank appears ready to act if needed.