Archive - Jun 22, 2015

• Mood brightens after latest Greek offer to creditors (Reuters)
• ECB's Nowotny - Greek banks have funding extension for today (Reuters)
• Any Greece deal must match party manifesto, minister says (Reuters)
• Greece says now up to lenders to move on an agreement (Reuters)
• Greece sends wrong documents to monitors... Again (FT)
• U.S. won't let Russia 'drag us back to the past': Pentagon chief (Reuters)
• Belgium unblocks part of Russian diplomatic missions’ frozen accounts (Tass)
• Fed Scoop Heralded Era of Closed Doors for $100,000 Newsletters (BBG)

The market has shaken off Friday’s Greece jitters and has convinced itself a deal remains the base case, or indeed the only case. Even with capital controls as an interim step, the argument goes, such a harsh reality will bring compromise. This argument is proffered by those who think Greece is being “difficult” Another argument says the EU and IMF know that a Greece default is a bad thing, perhaps a really bad thing (despite all the protesting to the contrary) and will see their way to a deal. If only Greece would give them a face-saving way to pull it off

today is Friday taken to the n^th degree, with the markets having already declared if not victory then the death of all Greek "contagion" leverage, following news that a new Greek proposal was sent yesterday (which as we summarized does not include any of the demanded by the Troika pension cuts), ignoring news that Greece had again sent Belgium the wrong proposal which the market has taken as a sign of capitulation by Tsipras, and as a result futures are surging higher by nearly 1%, the German DAX is up a whopping 3.1%, on track for the biggest one day gain in three years, Greek stocks up over 8%, German and US Treasurys sliding while Greek and peripheral bonds are surging.

“Systemic risk is in the system [and] we are in uncharted territory. Think about holding other assets. That could mean precious metals, it could mean physical currencies.”