Tuesday, April 7, 2015

Greek PM to meet Putin in Russia | FOMC minutes will be published later today

According to Reuters, sources in Russia have it that the government of Vlad Putin is prepared to provide loans to Greece as well as a price cut on natural gas sent to the Hellenic Republic by the Russian state gas company, Gazprom. The Russian leader and Alexis Tsipras, Greek Prime Minister, are due to meet in Moscow today. Reuters has also reported that Russia is interested in unspecified Greek assets. This could be interpreted to mean a stake or outright ownership of the Greek gas company, DEPA, which is currently 65% owned by the Greek government sponsored Hellenic Republic Asset Development Fund (TAPED). Apparently Gazprom has run the rule over the Greek gas operation already, but backed off after “…failing to receive enough guarantees over DEPA’s financial position”. Hmmmm.

Greek IMF loan repayment and bond auction

Separately, the Managing Director of the IMF, Christine Lagarde, is satisfied that the loan repayment instalment that was due by Greece by tomorrow (9th. March) will be paid. She said as much in a press release that was posted on the IMF website last Sunday (5th March).

Of immediate interest is an auction of Greek government bonds scheduled for today. The secondary market is already pricing Greek debt at a very high rate of interest. The success or otherwise of today’s auction will be a significant straw in the wind.

All of this heightened activity around the Greek situation has the potential to cause real volatility in the Euro against its counterparts. The markets will be poised for any and all news from Moscow today and tomorrow and, as usual, in the absence of solid information, rumours may be called upon to fill the gap. There are, of course, political forces in play because of the sanctions that have been imposed on Russia over Ukraine, and it may be assumed that the Machiavelli brothers, Vlad and Alex, will waste no opportunity to cause possible embarrassment to their respective adversaries in the European Union, and even further afield.

FOMC minutes will be published later today

Since the last Monetary Policy statement by the US Federal Reserve, we have had a particularly poor Non-Farm payrolls report, which brings into sharper focus the dovish tone of the statement. The minutes of that monetary policy meeting, which are due to be published later today during the US session, will be scrutinised carefully for possible confirmation that core interest rate rises in the USA will not, after all, take place this year.

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