Euro remains firm against dollar on optimism that somehow, there would be a deal in some sort to help Greece avoid disorderly default in March even though the progress has been extremely slow and unsatisfactory. Greek Prime Minister Papademos is expected to meet with three party leaders today finally to agree on the austerity measures. That’s a key in clearing the EUR 130b second bailout from EU IMF. The progress on PSI has be “constructive” has described by Papademos. Meanwhile, there were reports that ECB would accept some sort of haircut which could help Greece lower it’s debt by EUR 11b. After all, nothing is solid yet. But somehow, when investors patience limit was far breached, they seem to be looking beyond Greece. Regarding Private Sector Involvement, EFSF Deputy CEO … Read entire article »

By: Barbara Zigah The Euro continues to hold close to a 2-month peak with investors hopeful that the Greek government will finally agree to the conditional measures necessary to obtain the second bailout loan which would prevent a disorderly default. As reported at 12:10 p.m. (JST) in Tokyo the Euro was trading against the greenback at $1.3252, a decline of 0.1% but still close to the 2-month peak of $1.3270 which was struck on the EBS trading platform yesterday. Analysts say that the Euro’s bounce was largely a result of a short-positioning squeeze as opposed to an optimistic view of the Eurozone. Greece’s newest deadline is today, though a rally in the common currency is likely to be limited in scope. One analyst points out that the markets have already buoyed the … Read entire article »

Although Greece’s PSI and its access to the new tranche of bailout fund dragged on, market sentiment appeared to have improved since the last ECB meeting. Moreover, reaction to the 3-year LTRO was positive while economic data over the past few weeks showed improvement. These should allow the ECB to keep the main refinancing rate unchanged at 1% and leave the unconventional monetary measures unchanged. The EU summit held in early February made little progress. The leaders, except the UK and Czech Republic, agreed to sign a Germany-inspired fiscal pact. However, it’s understood that it would take a long time for the sovereign debt crisis to be cured. Economic data released since the January showed improvements, though. The Eurozone PMI rose to 50.4 in January, returning to expansionary territory for the … Read entire article »

European majors remain generally firm in Asia today after rallying broadly on Greek speculations. There were rumors that political leaders were set to agree on the austerity measures yesterday, but such meeting with Prime Minister Papademos was delayed to today with one leader blaming the delay to ‘missing paper’. Papademos has met troika last night on finalizing the terms for the EUR 130b second bailout. Meanwhile, there are reports that ECB is willing to accept some sort of haircut which could help Greece lower it’s debt by EUR 11b. It’s reported that ECB is holding EUR 50b of Greek bonds which it paid EUR 39b for. With certain mechanism, ECB could return the bonds to Greece, through EFSF, and get back EUR 39b. Effectively Greece would have … Read entire article »