LONDON: Synthetic credit indices in Europe are tighter on the open after the S&P eked out a record close yesterday and the Nikkei added 1.18% overnight on a bout of modest yen weakness. Elsewhere in Asia is subdued courtesy of the Chinese New Year holidays, with SPH5 marginally in the black and Treasuries bouncing slightly after yesterday's heavy losses to leave 10-year yields just over 2.12% and the curve a couple of basis points flatter.
The Main is 1.75bp tighter at 56.375bp, the Crossover 7.5bp tighter at 300.5bp and the Senior Financials 2.5bp tighter at 65bp, according to Tradeweb at 8am UK time.
If Monday and Tuesday were all about Greece then the latest on the matter yesterday has the new Syriza government reportedly set at some point today to request a six-month extension to its loan agreement, but attempting to distinguish that from its full bailout programme - a move that has already been given short shrift by the German finance minister late last night.
Looking to today and the agenda offers some respite from Greek matters, at least in terms of scheduled events, with focus shifting to central banks.
The BoJ has already announced its decision to leave policy unchanged, which was wholly expected given only three and bit months since Kuroda shocked the world with expanded QQE at the end of October.
Back to Europe and first up this morning are the minutes of the Feb 5 BoE MPC meeting at 9:30am. The vote on rates and QE should be unanimous at 9-0, although there is an outside chance of another split, especially given former dissenter Weale's comments in the weekend press that rates will need to rise sooner than investors currently expect.
Still in Europe and the ECB will be sitting down shortly in Frankfurt for a non-monetary policy meeting to discuss, amongst other things, Greek ELA. Weidmann is known to feel uncomfortable with the assistance, but absent a two-thirds majority it seems almost certain that the plug will not be pulled at this sensitive stage of proceedings.
Data-wise and Europe draws a blank this morning leaving the focus on the UK, with unemployment stats from the ONS at 9:30am where the rate is expected to remain at 5.8%, the claimant count to drop by 25k and average earnings to stick at 1.7%.
There is a EUR4bn 10-year Bund tap in terms of scheduled supply (bidding deadline 10:30am UK time), ahead of housing starts/building permits, PPI and industrial production for the US this afternoon. The minutes of the January 27/28 FOMC meeting follow at 7pm.
Greek official confirms Greece will ask for an extension of the loan agreement on Weds; specifies this is different to a bailout extension as it would be agreed under different terms.
Extension request will be based on the Moscovici proposal presented before the Euro group on Monday; this was a 4m extension and said Greece would not roll-back reforms; article notes this plan was effectively rejected by the Euro group on Monday, according to the FT.
German Fin Min says still awaiting a binding and credible proposal from Greece; question is not one of loan agreements; question is whether bailout program will be fulfilled.
Greek Fin Min sees likely agreement with EZ on financing; expects a text that everyone happy with.
ECB will face pressure not to increase the Greek ELA from Germany; ECB is unlikely to lower the current 65bn ceiling; Weidmann wants to avoid indirectly financing the Greek state; other members have similar concerns, according to sources.
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