With the new and revised (until it is re-revised again to some future date), Greek D-Day set for today’s third in the past 2 weeks Eurogroup meeting, every favorable headline serves as a springboard for ES-buying algos, while every negative headline is promptly ignored. And since this is Europe’s style trial ballooning, there have been many of both with just these two hitting in the last hour:
Guess which one pushed ES into the green? Of course, what the “bullish” headline did not inclide was the subtext which was that “We have covered four fifths of the distance, they also need to cover one fifth,” according to the Greek the official said, adding Greece wanted to clinch a deal on Friday, but that it would not back down in the face of pressure from the Eurogroup. “The official, speaking on the condition of anonymity, said Greece had made a lot of concessions to reach an agreement and that the euro zone should show some flexibility too.”
In other words, more hope interpreted as fact.
And just in case today’s summit achieves nothing, don’t you dare sell your stocks, because, drumroll, another meeting may be right around the corner, providng many more such risk-ramping opportunities as the market prices in yet another successful Greek deal and forgets to sell-off on the disappointment. Also from Reuters which is really covering all bases, because remember that the biggest source of revenue for Reuters is not resporting the news but FX trading, hence FX vol is quite welcome:
Euro zone finance ministers will try again on Friday to break a deadlock over Greece’s urgent need for further financing but it may take an emergency summit of the currency bloc in the coming week to clinch any deal.
With EU paymaster Germany and the new radical leftist-led government in Athens digging their heels in over demands that Greece stick to strict austerity conditions in its international bailout programme, the two sides seemed far apart hours before a crucial Eurogroup meeting in Brussels.
“The Greek government has done all it should at every level in an effort to find a mutually beneficial solution,” government spokesman Gabriel Sakellaridis told Mega TV.
“We are not discussing the continuation of the (bailout) programme,” he said. “The Greek government will maintain this stance today, although conditions have matured for a solution to be found at last.”
So aside from Greece, which is what everyone’s attention will be glued on, which starts at 14:00 GMT and whose press conference is tentatively scheduled for 18:00 GMT but will either be substantially delayed, or not even take place if for the third time Greece is unable to reach a deal, what else is moving markets?
European equities have been fairly resilient to this morning’s FX moves and concerns around Greek negotiations, and although the major bourses trade marginally lower, they have drifted within yesterday’s range. The FTSE 100 is outperforming its peers due to strength in index members, with Standard Life higher by 2.9% after an earnings update, Weir Group higher by 1.6% after a positive broker move pre-market, and the prospect of a dovish BoE supporting prices.
Ahead of the Eurogroup meeting attention will be paid to any comments from the German state after they rejected yesterday’s Greece proposal, comments from Eurogroup officials as they arrive at today’s meeting, and any draft documents leaked before the official release. Other than that focus will fall on today’s only tier 1 US data release with Manufacturing PMI due at 1445GMT and it is also worth bearing in mind that there are several options expiries across fixed income and equity futures.
Fed’s Bullard (Non Voter – Soft Hawk) reiterated his call for the Fed to start raising rates, saying zero is not the right rate given the US economy. Bullard added that removing “patient” at March meeting would allow but to obligate Fed to raise rates in June. (RTRS)
