Economic Data
(AU) RESERVE BANK OF AUSTRALIA (RBA) FEB MEETING MINUTES: INFLATION OUTLOOK WOULD PROVIDE SCOPE FOR AN EASING IF DEMAND WEAKENED "MATERIALLY"
(JP) JAPAN DEC ALL INDUSTRY ACTIVITY INDEX Y/Y: 1.3% V 1.5%E (6-month high)
(KR) SOUTH KOREA Q4 EXTERNAL SHORT TERM DEBT: $136.1B V $139.9B PRIOR
(NZ) NEW ZEALAND Q1 RBNZ 3-YR INFLATION EXPECTATIONS: 2.5% V 2.8% PRIOR (10-quarter low and 3rd consecutive quarter of decline)
(MX) Mexico Banamex Survey: Sees CPI at 3.83% at the end of 2012 and 3.64% at the end of 2013
Markets Snapshot (as of 05:30GMT)
Nikkei225 -0.3%
S&P/ASX +0.8%
Kospi -0.3%
Taiwan Taiex -0.5%
Singapore Straits Times -0.1%
Shanghai Composite -0.1%
Hang Seng -0.5%
S&P Futures +0.4% at 1,366
April gold +0.7% at $1,737/oz
April Crude +1.5% at $105.12
Overview/Top Headlines
Markets started the session off cautious with some profit taking due to uncertainty in the with a marathon session over Greece's fate ongoing. When details of Greece's second bailout agreement were reached (please see special section below with complete details) EUR/USD tested a 3-month high as details came out, but was unable to break through $1.33 handle, testing to $1.3293. EUR/JPY gained over 0.5% to ¥105.96 before falling back to the ¥105.80 level. Copper gained 1.6% to $3.77, silver up 1.5% to $33.73. 2-year US note rose above 0.31%, nearly a 4-mon6th high. It is important to note that parliament approvals will be needed from EU nations for the Greek bailout agreement. Details from Troika debt sustainability report suggest the imposed austerity measures will sink Greece into a recession so deep, it would prohibit recovery to levels consistent with "debt sustainability." Crude continued to gain testing $105.80 and rolling into its new contract, major airlines in the region were under pressure from higher fuel prices. AUD/USD fell against its crosses after the RBA meeting minutes indicated that there was scope to ease policy more. Australia terms of trade fell 7% last quarter from record highs.
Greece Bailout Details
(GR) EUROGROUP FINANCE MINISTERS REACH DEAL FOR GREECE WITH TOTAL FINANCING OF €130B; DEBT TO GDP TARGET OF 120.5% BY 2020
PSI
Greece bond exchange (PSI) expected to start on March 8th.
The Greek bond exchange is expected to be completed in 3 days.
Final haircut to be 53.5% v 50% sought by creditors.
Private investors agree to increase coupon on new Greek bonds; to begin at 2%, increase to 3% before 2020, increase to 4.3% from 2021 until maturity.
The weighted avg coupon of the new bonds is 3.65% over 30 years and 2.63% for over the first 8 years.
Bondholders to receive 15% of Greek bonds swapped into EFSF bills.
For bondholders, 31.5% of principal to be swapped into new Greek bonds
New Greek bonds to have maturities from 11 to 30 years.
The new Greek bonds to be governed by English law.
ECB Role
National Central Banks WILL NOT participate in debt swap.
National Central Banks will contribute 1.8% of GDP to Greece' debt reduction.
ECB will forgo profits on Greek debt as part of second package.
Other Terms
Rate on Greece's original loan will be cut.
Greece will set up segregated account for aid flows.
Monitors to have permanent presence on the ground.
Speakers/Geopolitical/In the press
(GR) German Fin Min Schaeuble: Greece deal is pending on reaction of the private sector's voluntary swap of their bond holdings; National central banks will contribute 1.8% of GDP to Greek debt reduction
(GR) IMF's Lagarde: Will discuss the extent of IMF contribution to second Greek package in the 2nd week of March - press conference
(KR) Supply of new homes in Seoul, South Korea fell sharply in Jan; Home sales rising in other parts of Korea - Korean press
Equities
RIO: CEO Walsh: Iron ore market faces uncertainty over the next 6-months due to financial turmoil in Europe and the US dents the confidence of Chinese customers; Should level out in H2 - The Australian
Mazda Motor, 7261.JP: May raise up to ¥170B in capital; ¥100B to come through new shares (35% of market cap) - Japan press
9101.JP: Nippon Yusen, Mitsui O.S.K. and Kawasaki Kisen Kaisha are all planning to sell off and decommission vessels to help streamline and save on expenses - Nikkei
CHA: To become the 2nd telecom firm in China to offer iPhone 4S starting on Mar 9th
DOW.AU: Reports H1 Net A$85.0M v A$71.2M y/y, Rev A$3.93B v A$3.43B y/y
Mitsubishi Corp, 8058.JP: Looking for a partnership in China for a $10B iron ore/port and rail development in Australia - SCMP
OST.AU: Reports H1 Net loss A$74M (includes A$130M impairment charge) v profit A$116M y/y; Rev A$3.73B v A$3.3B y/y; To cut another 430 jobs