Sentiments Lifted Mildly by Greek Parliamentary Approval

Asian markets are lifted mildly as Greek parliament approved the austerity package, clearing an important hurdle to secure the EUR 130b second bailout from EU/IMF. Out of 300 lawmakers, a total of 199 voted in favor of the bill and 74 against. One important thing to note that 22 PASOK MPs and 21 New Democracy deputies voted against the bill and were ousted from their parties. That's the first time in Greek history with so many lawmakers ousted on the same night Greek Prime Minister Papademos said that "the full, timely and effective implementation of the program won't be easy," and there will be "short-term sacrifices for the Greek people". Anyway, now, Greece should be ready submit the whole package, including the PSI debt swap deal, to EU finance ministers on Wednesday for approving the bailout.

The Confederation of British Industry lowered it's GDP forecast for 2012 and 2013 and noted that "economic conditions will continue to be tough, especially in the first half of the year." GDP is projected to grow 0.9% in 2012, down from November's projection of 1.2%. GDP in 2013 is projected to grow 2%, down from 2.2 % prior forecast. Though, Director general John Cridland also noted that "has picked up since before Christmas, and the mood among many businesses has improved".

Talking about GDP, Japan's GDP showed -0.6% qoq contraction in Q4, or -2.3% annualized contraction. That's much worse than market's expectation of -0.3% qoq or -1.6% annualized. The contract was mainly due to weak exports that was exacerbated by slowing demand and Thai floods. Indeed, the cabinet office noted that "in December exports and production increased after (the initial damage from) flooding in Thailand, and if we take those factors into account and look at the overall economic situation I think we can say that upward movement is continuing". Also released from Japan, Tertiary industry index rose 1.4% mom in December.