Remember that Greek bondholder PSI agreement that was "imminent [4]", and which we said ain't coming [5]any time soon, probably never? Well, the latest bout of the IIF's overpromising and never delivering, something the Charles Dallara agency has been so good at in the past, [6]is starting to creep into market sentiment, precisely as predicted by the Einhorn diagram [7]that explains market trading patterns, and newsflow excrement, better than anything in the past year. Below Bloomberg summarizes just how the latest revulsion at leadership betrayal is starting to hurt the market which may be about to lose all its recent gains driven purely by optimism.
From Bloomberg:
First Word Cross Asset Dashboard shows sentiment slipping with FX, commodities, equities lower as markets pare risk ahead of expected Greek debt swap agreement by week’s end, writes Bloomberg analyst TJ Marta in following note:
- Initial Greek debt agreement announced according to Greek newspaper Proto Thema; IIF MD Dallara says may have something to announce on Greek talks today
- Asian equities, yields reflected generally positive sentiment; equities up moderately to significantly, led by TOPIX +2.0%
- EU equity indexes mostly down moderately, led by Euro Stoxx 50 -0.6%; U.S. futures mixed in moderate ranges
- US$ modestly to moderately higher vs all major FX; European currencies, which rallied strongly earlier this week, are underperforming; euro down vs all except krone, krona
- Commodities mostly modestly to moderately lower with US$ strength
- Treasury yields mixed in modest ranges, with curve steeper
- Bund yields moderately higher; EU sovereign yield to bund spreads mostly tighter; exception is Spanish spreads extremely wider, with 2yr +30bps, 2.0 std. devs. to 325bps; Spain seeks 20% cut in bank branches, jobs