Intraday Market Thoughts

Greece Hits the Target, China Data Upcoming

by Ashraf Laidi
Mar 9, 2012 0:46

The Greek PSI deadline has passed but leaks suggest it has easily surpassed the 66.6% collective action clause threshold and maybe be above the 90% target. The euro was the top performer while the yen lagged as risk assets cheered the news. The ECB and BOC both left rates unchanged. China CPI is due next. Thursday's Premium note is found below.

It was an extremely busy day in the markets. The ECB held rates at 1.00%, as expected but the euro rallied as Draghi revealed ECB forecasts for higher inflation. The euro gave back some of these gains as he blamed oil the change and continued slipping as officials lowered 2012 growth estimates.

Canada also held rates at 1.00% but the Canadian dollar rallied on upbeat comments on the economy and a higher inflation forecast. USD/CAD fell below 0.99 cents.

In the US, initial jobless claims at 362K were worse than the 352K expected but the overwhelming focus was on the PSI deal. The deadline to participate was late in US trading but there was a nearly non-stop trickle of positive indications that propped up broad market sentiment. The official results will be announced at 0600 GMT.

The next question is whether Greece will invoke the collective action clauses on the remainder of bonds. That could happen as soon as Friday with the ISDA likely to trigger CDS shortly after. The only way Greece can avoid this outcome is by paying out 100% on the non-participating bonds something they said they wouldnt do.

China is the focus of the upcoming session. CPI is due at 1:30 am expected at 3.4% y/y. At 0530 GMT, industrial production is expected up 12.5% y/y and retail sales are expected up 17.4% y/y.

Thursdays Premium note is due is found here: ?a=613 NonSubscribers can click here:

Ashraf will be on CNBC Europe on Friday at 6:20 am GMT.


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