At the end of the session yesterday, the ECB announced that it would stop taking Greek government bonds used by banks as collateral under its return for funding program. Under this program, banks are able to use junk-rated Greek government bonds as security with the ECB if Greece complied with conditions imposed by the Troika. Bank access to this program will be maintained until February 28. This decision is a clear attack against the new Greek government, to make it comply with the financial restrictions that have been imposed by its creditors. Greece now has 25 days to find an accord with its creditors. Now we wait to see who will win the stare-down between the ECB and the Greek government.
This decision had a major impact on North American stock markets and the euro yesterday, which all fell at the end of the session. Markets are nervous this morning, and a lot of volatility is to be expected across all asset classes in the coming days. In terms of economic indicators, we are awaiting U.S. Initial Jobless Claims and Trade Balance figures this morning at 8:30 a.m. Have a good day.
Emmanuel Tessier-Fleury
Range of the day: 1.2460-1.2600