Archive - Feb 15, 2012

Greek "idiotic" 3:30 pm rumor undone-

• GREEK CONSERVATIVE PARTY SAYS POLICY MODIFICATIONS "MIGHT BE REQUIRED" FOR IMPLEMENTATION

But don't expect the market to give up the gains . After all, the market only goes up on rumors, but never down on refutation, or as it is otherwise known, reality.

• Europe ushers in the recession: Euro-Area Economy Contracts for the First Time Since 2009 (Bloomberg)
• Greek conservative takes bailout pledge to the wire (Reuters)
• China Pledges to Invest in Europe Bailouts (Bloomberg) - as noted last night, the half life of this nonsense has come and gone
• Japan's Central Bank Joins Peers in Opening the Taps (WSJ)
• EU Moves on Greek Debt Swap (EU)
• EU Divisions Threaten Aid For Greece (FT)
• Athens Woman facing sacking threatening suicide (Athens News)
  
• King Says Euro Area Poses Biggest Risk to UK’s Slow Recovery (Bloomberg)
• Sarkozy to Seek Second Term, Banking on Debt Crisis to Boost Bid (Bloomberg)

Update 2: IRAN OIL MINISTRY DENIES STATE MEDIA REPORTS ON TEHRAN STOPPING OIL EXPORTS TO SIX EU STATES. I.E., total confusion

Update: Brent over $119; WTI over $102

PressTV has just issued a breaking news alert:

• In response to the latest sanctions imposed by the EU against Iran's energy and banking sectors, the Islamic Republic has cut oil exports to six European countries
• Iran on Wednesday cut oil exports to six European countries including Netherlands, Spain Italy, France, Greece and Portugal.

Still positive that China does not want Iran's crude? Oh, and congrats on just buying yourself record high gasoline prices Europe.

Presented with little comment except to note that the initial ebullient spurt in US futures (which as we noted is being ignored by credit markets in US and Europe so far) this afternoon was started with the Samaras comments and yet 2Y GGBs just broke 200% yield for the first time...is the market starting to get that perhaps Europe wants them out?

European corporate and financial credit markets are opening weak this morning - ignoring the exuberance in overnight ES futures (11,000 contracts in seconds on rumor of China for 10pt jump?) which is also leaking back rapidly to VWAP (even as European equity markets continue to levitate). Financials especially are now beyond yesterday's wides with subordinated spreads the underperformer for now. This extends from our comments yesterday that were picked up on CNBC with regard to the 'stigma-trade' in LTRO-encumbered banks (which is widening further this morning) as well as broad divergence between stocks and credit. Concerns over Ireland's fiscal consolidation plans balanced with a very slight beat on German GDP (though still negative) are seeing EURUSD leak back off its best levels of the night after it bounced off 1.31 in late US trading (on Samaras rumors then extended by this China chatter). Gold and Silver are pushing higher while Copper and Oil are stable for now (though notably up from yesterday's European close). European sovereigns are quiet for now while US Treasuries are slightly better bid.