Markets Steady With Eyes On EU Finance Minister Meeting On Greece

Markets are relatively steady in Asian session today following the steep move on Friday. The yen edged lower in initial trading but loss is limited. Meanwhile, dollar is trying to recover mildly against other major currencies. The main focus today will be on the meeting between eurozone ministers in Brussels on Greece. This is the third attempt this month to agree on a deal that would release the next tranche of bailout fund to Greece, and grant the country a two year extension on the fiscal adjustment program.

After a marathon meeting last week, the finance ministers failed to reach any agreement due to some technical complications. Nonetheless, French finance minister Moscovici said over the weekend that they are "very close to a solution" for Greece and "it would be irresponsible not to reach an accord given all the efforts that have been made on all sides."

And, on Saturday, eurozone finance ministers held a conference call to prepare for today's summit. It's reported that they came up with a way to make up EUR 10b to fill the financing gap due to the two year extension. That include measures like lowering interest rates on the bailout fund, debt buyback and applying central bank profits on Greek bonds. However, it's also reported that the idea to lower interest rates was a main show-stopper to cutting the deal.

Meanwhile, IMF has been persistently insisting that Greece needs to meet the debt target of 120% of GDP by 2020, instead of 2022. Euro has been supported by the optimism that a deal would eventually be reached and would be volatile on Greek news in the early part of the week.

The minutes from the October 30 BoJ meetings showed that two policy board members proposed to have stronger wordings on the central banks commitment to easing. Takehiro Sato suggested to say that the easing policy will continue "until it judges that 1% [inflation] has been steadily maintained," and Takahide Kiuchi supported the proposal. But most other members rejected as "it seemed unlikely that the continuation of the bank's monetary easing was being questioned in the markets."

Meanwhile, there was also a joint statement between BoJ and the government, for the first time in history", on pledge that they will work together to bring Japan out of deflation as soon as possible. And a representative from the cabinet office said that "this would be an important step toward overcoming deflation, which was a challenge Japan had confronted for over a decade."

Latest CFTC data showed that euro net shorts rose again to 83.6k contracts on November 13, up from 67.1k a week ago. Sterling net long dropped sharply to 8.2k, comparing to 19.3k a week ago, and 30.1k high back in October. Japanese yen net shorts dropped slightly to 30.4k comparing to 40.1k a week ago. But that, yen had 29.3k net longs back in early October.

The Australian dollar long continued it's steady rise to 68.1k, comparing with 38.4k back in October. Canadian dollar net long, on the other hand, continued its steady decline to 66.11k, comparing to 111.9k back in September.