Creditors

“I was spooked. It looked at first like a real default so I rushed to the bank."

“I used to take out half and leave the rest for an emergency. Now I feel relieved it’s there and make sure I take out every last lepto [cent].”

Surprise! Germany has begun to talk back their exuberant headlines over a Greek compromise. As Reuters reports, Germany will only accept a cash-for-reform deal between Greece and its international creditors that has the approval of all three lending instutions, a government spokesman said in response to reports that Berlin was considering easier terms, "all else is pure invention."   EURUSD has faded back all of the headline gains... but for now US equity futures remain convinced.

While we await for Germany to deny the latest "Greece is fixed" report, below is a quick update of what is going on with Greek bank liquidity. It is not good.

After all the sound and fury from Schaeuble, we are now to believe he is ready to back down...

*GERMANY SAID TO CONSIDER SETTLING FOR ONE GREEK REFORM UP FRONT, OFFERING GREECE STAGGERED DEAL ON AID

Stocks and the Euro have resurged on the news. We await Germany's denial within the next 30 minutes (and the subsequent FBI investigation)

While the Greek government has wasted the past 4 months experiment with game (and hope) theory-based negotiations with the Troika, debating what reforms it should implement, what the budget surplus should be, and how much of a pension and wage haircut the local workforce should undergo just to keep the trickle of European money flowing and "allow" the IMF to repay Greek IMF obligations and the ESM to repay the ECB, the Greek economy has slammed into a brick wall because according to Greece's retailers association, about 59 businesses close down and some 613 jobs are being lost each day.

Greek PM Alexis Tsipras "hasn’t made a good impression on me in the last few days,” an official from Germany's Social Democrats (Angela Merkel's junior coalition partner) says, while a senior lawmaker from the Chancellor's Christian Democratic bloc contends that Greece "is not serious at all."

• Pressing for Greek concessions, Merkel and Hollande keep Tsipras waiting (Reuters)
• Treasuries Extend Slump as Pimco Dumps Two-Thirds of Holdings (BBG)
• U.S. prepares plans for more troops, new base in Iraq: officials (Reuters)
• Texas policeman resigns after video shows him toppling teen (Reuters)
• Kuroda Says Hard to See Yen Dropping More, Spurring Surge (BBG)
• Tech Startups Woo Investors With Unconventional Financial Terms — but Do Numbers Add Up? (WSJ)
• Putin is a 'bully', U.S. needs to respond resolutely: Jeb Bush (Reuters)

After a Chinese session which following the MSCI failure to include Chinese stocks in its EM index, if only for the time being, was largely a dud with Shanghai stocks actually dropping by 0.1% after a late day selloff, eyes turned to Europe, which once again did not disappoint and where the bond rout continued apace, with the 10Y Bund yield spiking just after the European open, and rising above 1.05%, the widest level since September 19, before recouping some losses and trading just around 1.00% at last check.

In attempt to bridge the gap between a proposal submitted by Greek PM Alexis Tsipras last Monday and a draft agreement devised by creditors the following day, Athens has reportedly submitted a "revised" proposal to creditors. Unnamed officials say the new draft is "not credible" and represents but "a vague rehash" of last week's effort. Meanwhile, Athens is looking to tap ESM emergency funding to pay the ECB.

• Greece Said to Submit Revised Budget Plan in Bid for Funding (BBG)
• Protesters seek firing of Texas officer who threw girl to ground (Reuters)
• HSBC to cut 50,000 jobs in quest for higher dividends (Reuters)
• U.S. base shipped live anthrax to 19 states plus D.C.: Pentagon (Reuters)
• Obama Administration Opens Door for More Student-Debt Forgiveness (WSJ)
• China Said to Weigh Margin Finance Rule Change Amid Stock Boom (BBG)
• Doctor who trained U.S. troops suspended for macabre techniques (Reuters)
• Exxon to Face Regulators’ Questions Over Quakes (WSJ)

After a quiet Asian session, where not even the latest Chinese CPI miss was enough to push the SHCOMP to new multi-year highs, all eyes were on Europe where a few hours ago the European Commission announced it had received not one but two new proposals from Greece with the Greek government adding that it considers proposals submitted last week as remain basis for political negotiations. However, barely had Europe received the Greek addenda when it nein'ed all over them, with BBG citing an international official directly involved in talks saying that the "Greek government's revised proposal to unlock bailout funds is vague rehash of earlier plans, not considered credible."

DAX futures have jumped 50 points (back above 11,000), and Dow Futures are up 60 points off the day's lows as yet another Greek rumor headline hits the wires. While the market reads the WSJ headlines on the extension of third Greek bailout to March 2016 as positive, Tsipras has already, according to the WSJ, rebuffed it as "unacceptable" because in exchange for the offered extension, Juncker and Dijsselbloem require implementing policy overhauls as well as pension cuts and tax increases, both of which just happen to be the Greek 'red lines.'

“A positive scenario requires almost everything to go right from now on,” BofAML says, adding that “Greece needs to receive new funding before the end of June, otherwise it will not be able to repay the IMF on June 30 … which would put ELA access of Greek banks at risk.” 

• White House denies Obama said strong dollar a problem (Reuters)
• Lira Falls to Record Amid Stock Rout as AK Party Loses Majority (BBG)
• Bond-Market Game of Chicken With Fed Is Riskier Than Ever (BBG)
• Xetra Dax enters correction territory (FT)
• China trade shrinks amid slowing demand (FT)
• Greek government eyes compromise with lenders, rules out snap polls (Reuters)
• If You Think Greece’s Crisis Will End Soon, Think Again (BBG)
• China growth data ‘overstated’ due to data error (FT)
• Calpers to Cut External Money Managers by Half (WSJ)

While there were key macroeconomic data out of Asia earlier in the session, with Japan revising its Q1 GDP up from 2.4% to 3.9% (due to an upward revision to capex) making some wonder if it simply didn't snow in Japan this winter, as well as Chinese trade data that was once again disappointing with the third consecutive drop in exports coupled with an 18.1% collapse in imports hinting that nothing is going well in China's economy (which once again sent stocks soaring this time up another 2.2% on certainty another PBOC rate cut is imminent, pushing the PBOC to a fresh 7-year high of 5,132), it was actually a leaked Obama comment on the strong USD that moved markets.