From Peter Tchir of TF Market Advisors
The PPT Must Have Thought We Had Moved To Daylight Savings
Time and left at 3pm after trying to ramp it up then. Weird day. The morning drop seemed overdone based on "fears" of a German vote against the ECB/Bank bailout using Greece as a conduit for the money. The vote was strongly in favor which made markets happy, though someday maybe someone will present an argument other than "give them money or plunge the world into chaos".
The lack of news out of the IMF wasn't good, but it keeps the ability to create rumors of new money alive and well, which is probably far more useful on a day to day basis in this market.
Pending home sales sparked some excitement too. Though we will see how many close, and more importantly, how much of a role the great weather played.
Greece is moving inexorably towards a CDS Credit Event. ISDA has been asked to opine on if one has already occurred. I understand the argument, but don't think it will be enough to trigger CDS. The PSI process still seems to be run by a bunch of amateurs. Since no one expects anything more from them, it doesn't spook the market. The ECB's holdings of March 20th bonds seems rather larger (same for the May issue). That may become an issue for those looking to holdout.
The Spanish Budget Minister Montoro literally laughed when asked about the ability to bring the 8.51% budget down to the EU's 4.4% target. I guess with LTRO2 coming, budget deficits aren't a big deal.
And finally, the market seems completely driven by Apple. At any moment in time, if you know where APPL is trading, you can get the S&P and Nasdaq pretty accurately. It has replaced the EUR as the thing to watch intraday, or so it seems.
My favorite bonds (or at least series of bonds) were the Italian ponzi bonds issued by the likes of Unicredit on the day of the last LTRO. Clearly they already know what they plan to do on Wednesday, as do other banks. I expect more accurate rumors to start coming out tomorrow. I lean towards a relatively small take-up, which will disappoint the backdoor QE crowd at first, but will try and bounce on the spin that all is good and banks don't need money.