United States: Fed approaching lift off
United States: Weekly jobless drop

Good morning,

The good people of Europe are in a huddle this morning trying to figure out how to bridge the gap between the hard-line Germans and the desperate Greeks. The future of the Euro is at stake, so this is a big deal!

The Greeks have blinked, but the Germans say it’s not enough.

The ECB is trying to hold it all together and prevent a bank run in Greece. The ECB also extended the ELA for another two weeks for Greek banks and increased its available funds to €68.3bn (from€65bn). Overall, the risk of capital controls and exit talks are likely to increase significantly.

Despite the negative headlines on Greece, risky assets broadly have behaved well in Europe this week. In particular, there was very little spill over into core peripheral spreads. This means either the market is expecting an eventual resolution and is looking through the current noise, or it doesn’t believe that the consequences of disorderly outcomes (ie, Greek exit) will have much contagion effect.

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Global Macro-Daily Note 20th February 2015


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