Archive - Feb 10, 2015

While "sources" have yet to confirm anything about an extension for Greece (and some have actually denied it - Italy's Padoan "hasn't seen any plan yet"), US Treasury yields are rising (10Y back above 2.00%), and risk assets rallying in Europe and US. Greek stocks are up over 7% today (taking them up 2% on the week) but Greek bank bonds remain lower on the week (despite today's rally). US equities are sceptically rallying on the back of USDJPY momo ignition, auctioned up to pre-payrolls stops.

It appears, while Washington continues to proclaim they have single-handedly 'isolated' Russia and crushed its economy, nations around the world continue to want to do business with Putin and his nation...

*SISI: RUSSIA, EGYPT AGREE ON FREE TRADE ZONE W/ EURASIAN UNION
*SISI STRESSES IMPORTANCE OF MILITARY COOPERATION W/ RUSSIA

Judging by the images of welcome on the streets of Cairo, the people of Egypt are anything but looking to 'isolate' Russia... even after the US "bailed them out" and they still have US-taxpayer-backed guaranteed bonds.

A week after the release of a clip with sported professionally produced, near Hollywood-level editing and effects, showing the brutal burning of a Jordanian pilot hostage, Jordan announced it has deployed "thousands" of ground troops to its border with Iraq as it ramps up a campaign against ISIS militants, two Jordanian government officials told NBC News on Tuesday.  As NBC reports, the troops were sent to prevent the infiltration of ISIS fighters into Jordan and as a show of force, according to the sources who spoke on condition of anonymity. In other words, what would formerly have been seen as an overt act of territorial incursion, or as it is also known, a sovereign invasion, is now interpreted as a defensive act, one seeking to "prevent" infiltration by the same ISIS, that only exists due to US intervention in Syria in 2013.

While PRexit is yet to hit the headlines, Puerto Rico bonds joined an illustrious club of ne'er-do-wells today with its 10Y yield spiking above 10%...

• Greek defense minister says Greece has Plan B if EU rigid on deal (Reuters)
• Germany rejects Greek claim for World War Two reparations (Reuters)
• Greece to Seek $11.3 Billion in Financing to Avoid Funding Crunch (BBG)
• Lazard Sees $113 Billion Greek Debt Cut as ‘Reasonable’ (BBG)
• U.S. Navy Considers Setting Up Ship Base in Australia (BBG)
• Dalio’s Bridgewater Fund Said to Rise 8.3% in January (BBG)
• As U.S. Exits, China Takes On Afghanistan Role (WSJ)
• EU money funds cut exposure to bank debt (FT)
• China Inflation Drops to Five-Year Low in January (WSJ)
• Oil-Price Rebound Predicted (WSJ)

So far it has been largely a repeat of the previous overnight session, where absent significant macro drivers, the attention again remains focused both on China, which reported some truly ugly inflation (with 0.8% Y/Y CPI the lowest since Lehman, just call it deflation net of the "goalseeking") data (which as usually is "good for stocks" pushing the SHCOMP 1.5% higher as it means even more easing), and on Greece, which has not made any major headlines in the past 24 hours as patience on both sides is growing thin ahead of the final "bluff" showdown between Greece and the Eurozone is imminent. The question as usual is who will have just a fraction more leverage in the final assessment - Greece has made its ask known, and it comes in the form of 10 billion euros in short-term "bridge" financing consisting of €8 billion increase in Bills issuance and €1.9 billion in ECB profits, as it tries to stave off a funding crunch, a proposal which will be presented on the Wednesday meeting of euro area finance ministers in Brussels. The question remains what Europe's countrbid, if any, will be. For the answer: stay tuned in 24 hours.