Archive - Jul 17, 2015

Following Wednesday's Greek vote approving the draconian terms of the Third Greek bailout, the next biggest hurdle for the implementation of another round of Greek aid was Germany's parliamentary vote whether to endorse the terms cobbled together over last weekend. Moments ago it did just that in a vote which had been widely expected to pass without complications, when 439 members of the lower house of parliament voted in favor Berlin to starting negotiations on a third bailout program for Greece, 119 voted against and 40 abstained. A total of 598 votes were cast.

As lawmakers across Europe debate bridge financing and a third Greek bailout, IMF chief Christine Lagarde is out reiterating her stance on Greece's debt sustainability. Although Lagarde insists the IMF will not participate without some manner of debt relief for the Greeks, it now appears she is resigned to the fact that Germany will never agree to an upfront haircut.

• Back Greek talks or face chaos, Merkel tells German lawmakers (Reuters)
• Fear of the Unknown Binds a Greek Deal With Few Believers (WSJ)
• Grexit Still on the Table Even With EU’s Latest Band-Aid (BBG)
• Donald Tusk warns of extremist political contagion (FT)
• Germany, Not Greece, Should Exit the Euro (BBG)
• Sabine Files Bankruptcy in New York as Oil Prices Fall (BBG)
• Markets Bow to Central Bankers as Bonds Rise, Pound Strengthens (BBG)

 This is the continuation of the trend of China positioning the yuan as global reserve currency ... The Chinese are pushing for full convertibility of the RMB and increasing their gold holdings will create confidence in the fledgling reserve currency and aid them in this regard.

After weeks of overnight turbulence following every twist and turn in the Greek drama, this morning has seen a scarcity of mostly gap up (or NYSE-breakding "down") moves, and S&P500 futures are unchanged as of this moment however the Nasdaq is looking set for another record high at the open after last night's better than expected GOOG results which sent the stop higher by 11% of over $40 billion in market cap. We expect this not to last very long as the traditional no volume, USDJPY-levitation driven buying of ES will surely resume once US algos wake up and launch the self-trading spoof programs. More importantly: a red close on Friday is not exactly permitted by the central planners.