Afternoon Coffee: Greece Referendum Threatens Supply Chains, Sends Oil Falling

Greece's resounding refusal to accept additional austerity measures from its creditors further threatened its position as a regional port and transportation hub. As the crisis worsens and Greek companies struggle to maintain access to capital and supplies, global supply chain managers will likely have to adjust, choosing other countries to satisfy their business needs.

Following the rejection of bailout terms, US crude fell almost 5%, to $54.15, the largest drop in 3 months. The prospect of a Greek exit from the Eurozone and emergency measures to shore up Chinese stock markets are raising concerns the global economy is slowing, reducing the potential demand for oil.

The global reaction in other markets, however, was muted. The Euro Stoxx 50 fell more than 2% at opening and was down 2.4% in afternoon trading; at midday in New York, the Dow Jones was down just 0.2% and the S&P 500 was down 0.3%.

Sunday afternoon, the Euro dropped sharply, hitting points below $1.098 and rebounding to $1.1062, a net loss of 0.5%, as of Monday afternoon. A weaker Euro could cause concern in the US, as export prices comparatively rise.

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