Archive - Apr 8, 2010 - Story

Its not been a good week for Greece. Most seriously, the news yesterday that the four biggest banks are seeking help from the government following a drop in deposits of some EUR10bn pushes them into the danger zone which could turn into the end-game unless properly addressed. While the EU Summit spelled out how the crisis will be addressed (an IMF-led program co-financed by the Europeans), important uncertainties remain, including (1) whether the Greek government will agree to IMF conditionality; (2) how and when the European money will be disbursed and at what interest rate; and (3) whether the IMF/EU package will be big enough. - Erik Nielsen, GS

• Asia stocks, oil fall on Japan orders, US credit; Euro weakens on Greece.
• Australia jobless rate holds at 5.3%; half US level.
• Bank of Japan may raise forecasts for growth, prices on export-led revival.
• Bernanke, Dudley say recovery is yet to produce major job gains.
• Bernanke: Huge US budget deficits threaten the nation's long-term economic health.
• China will eventually allow yuan to gain.
• Consumer borrowing falls $11.5 billion in February, reflecting weakness in credit cards and auto loans.
• China's central government launched a nationwide crackdown on safety violations in mines.
• Greece to seek support from Asia

Panic in Greece as total freefall envelops both the bond and the stock market. The 10 Year is now at an absolute record 447 bps spread to bunds, or in the mid 7's in absolute terms. The stock market has tumbled by about 5% and Greek CDS have surged to a record.

RANsquawk 8th April Morning Briefing - Stocks, Bonds, FX etc.

Spreads were broadly wider in the US as all the indices deteriorated. IG trades 7.3bps tight (rich) to its 50d moving average, which is a Z-Score of -0.9s.d.. At 87.25bps, IG has closed tighter on only 16 days in the last 327 trading days (JAN09). The last five days have seen IG flat to its 50d moving average. Indices typically underperformed single-names with skews widening in general as IG underperformed but narrowed the skew, HVOL underperformed but widened the skew, ExHVOL intrinsics beat and narrowed the skew, HY's skew widened as it underperformed.