From RanSquawk [17]
- Greek PSI deal is announced, with 85.8% of bondholders agreeing to the swap.
- ISDA due to meet to determine if a Greek credit event has occurred.
- Market awaits US Non-Farm Payrolls data expected at 1330GMT.
Market Re-Cap
Going into the US open, markets are digesting the news that the Greek PSI deal has been completed, with the announcement being made at 0600GMT. The Greek Finance Ministry have announced that 85.8% of bondholders have agreed to the swap, and with CACs enforced, the participation rate can rise to 95.7%. However it should be noted that the Greek government have not enacted the CACs as yet. This has prompted a muted market reaction as participants await any further news from European officials.
In the next few hours, the Eurogroup are holding a conference call concerning the recent activity in Greece, and the ISDA are also meeting to determine whether a Greek credit event has occurred.
US Headlines
International market focus will now shift towards the key US Non-Farm Payrolls data, due at 1330GMT: US Change in Non-Farm Payrolls M/M (Feb) Exp. +210K (Prev. +243K, Dec +200K)
Chinese demand for US Treasuries could slow for a second year as the country as well as others find themselves holding fewer USD to use on US debt. This could see yields moving higher in 2012, according to analysis by Bank of America. (Sources)
Asian Headlines
The Japanese Finance Minister Azumi has said he thinks the BoJ will take appropriate action at an appropriate time, adding that forex and stock prices reflect the BoJ’s recent easing actions. (Sources)
China’s assistant banking regulator has said that China is still experiencing inflationary pressures, adding that inflation may not fall below interest rates. (Sources)
Chinese PPI (Feb) Y/Y 0.0% vs. Exp. 0.1% (Prev. 0.7%)
Chinese CPI (Feb) Y/Y 3.2% vs. Exp. 3.4% (Prev. 4.5%)
Chinese Industrial Production YTD (Feb) Y/Y 11.4% vs. Exp. 12.3% (Prev. 13.9%)
Chinese Retail Sales YTD (Feb) Y/Y 14.7% vs. Exp. 17.6% (Prev. 17.1%) (Sources)
EU and UK Headlines
The Greek Finance Ministry has announced the completion of the PSI deal, with 85.7% of bondholders agreeing to the swap. Following this, EUR 172bln worth of Greek bonds will be exchanged. The Ministry has said that should CACs be enforced, this participation rate can rise to 95.7%, however the Ministry have not disclosed if the CACs will be acted upon. (Sources)
-Greece have extended the tender on foreign law and SOE bonds to March 23rd and extended the settlement date for foreign law bonds to April 11th.
-Further commentary regarding Greece is expected later in the session as the ISDA are to meet in order to determine if a Greek credit event has occurred, as well as a Eurogroup conference to discuss the outcomes of the recent Greek activity.
The IMF has tentatively scheduled a meeting to discuss Greece’s bailout programme on March 15th if all actions agreed with the Greek government are completed according to IMF spokesman Rice. (euro2day)
UK Chancellor Osborne is looking to raise taxes on the pension contributions of the highest earners in this month’s budget. (FT-More)
-This move would release funds to help the more lowly paid but may antagonise some Conservative MPs. The centrepiece of Osborne’s budget is said to be a substantial increase in the income tax threshold to GBP 8,105 in April, paving the way for further increases to the GBP 10,000 target before the next general election.
UK House prices rose the most in four months in February as first-time buyers looked for homes with ‘urgency’ before a property-tax exemption ends in March, according Acadametrics and LSL Property Services. (RTRS)
-The average house price for a home in England and Wales rose 0.2% from January to GBP 219,855.
Britain’s Engineering Employers Federation have cut its 2012 economic growth forecast as the crisis in Europe weighs on demand, through prospects for manufacturers point to a pickup later this year. (RTRS)
-The group forecasts that UK GDP will expand 0.2% this year, down from December’s projection of 1.0%.
EQUITIES
European Equity markets remain muted ahead of the US open as markets attempt to digest the outcome of the Greek PSI deal as well as looking forward to the key US Non-Farm Payrolls data.
In individual equity news, Deutsche Bank have announced that they took as much as EUR 10bln from the ECB’s LTRO after the CEO was persuaded to participate, however the company have declined to comment. Commerzbank have also said that they took up a single-digit bln EUR amount in last week’s LTRO. (FT-More/Sources)
London Stock Exchange shares are performing strongly today following the announcements that they are to acquire a majority stake in LCH Clearnet. LSE shares currently trade up 8.18%. (Sources)
Top performing sectors in the BE500: Health Care (+0.64%), Consumer Services (+0.62%), Technology (+0.44%)
Worst performing sectors in the BE500: Oil & Gas (-0.39%), Financials (-0.32%), Telecommunications (-0.28%)
FX
The USD/JPY pair is performing strongly today following overnight reports from the Japanese finance minister subtly hinting towards further easing by commenting that the BoJ will take appropriate action at an appropriate time. (Sources)
GBP/USD is seen in negative territory ahead of the Non-Farm Payroll data at 1330GMT, with a touted option expiry at the 1.5800 level due for the 10am NY cut (1500GMT).
As such, the USD index is observed up around 0.35% ahead of the US open, with further fluctuation possible following the key jobs data.
COMMODITIES
Following the completion of the Greek PSI deal, WTI crude futures are trading in positive territory and Brent is holding above USD 125, heading for a sixth consecutive weekly gain. Markets now await the release of the US Non-Farm Payrolls data for February, due at 1330GMT/0730 CST.
Oil & Gas News:
• OPEC’s basket of crude oil rose to USD 124.13/BBL from USD 121.76/BBL yesterday, the highest level since July 22nd 2008.
• Bernstein Research have hiked their 2012 Brent forecast from USD 90/BBL to USD 105/BBL, reflecting continued high prices due to supply concerns around Iran.
• China’s implied oil demand for January rose 4.8% from a year earlier to 9.59MPD.
• China’s daily oil processing rose by 4% to 76.54mln metric tons in the first two months of this year, a new record, on the back of winter fuel demand.
• US Senate Democrats narrowly defeated a Republican proposal yesterday to take quick action on the Keystone XL crude oil pipeline. The proposal required an additional four votes to pass through.
• US Energy Secretary Chu has said the use of the Special Petroleum Reserve to bring down rising prices is still an option.
• The US Senate has also voted down a proposal attached to a transportation bill that would have allowed further drilling and exploration off the US east and west coasts. The Senate cited tourism concerns as the primary reason for turning down the amendment.
• Libya is producing up to 1.2MBPD of crude compared with 1.6MBPD earlier last year according to the country’s PM.
Geopolitical News:
• The UN nuclear chief said Iran has not contacted him about any access to the Parachin military site.
• Contrary to reports, the White House have said US President Obama and the Israeli Leader Netanyahu did not discuss bunker-buster bombs in the meetings held earlier this week.
• According to Iranian press, Iran’s IAEA envoy has said war threats violate the UN Charter and international law.