Greece lightning - Special comment 13 April 2010

Yesterday, FX markets reacted in early trading hours to the news that Eurozone countries pledged up to 45 billion Euros in aid for Greece at a 5% (lower than market rate) discount. The initial gap up/down was huge, gap remains open, but the retracement later in the day and the muted movement of a highly overbought US market is telling that the main markets are not exactly excited about the whole deal, which looks to me like a delay tactic of some sort. Even without that perspective, the long term solution is still more painful that the 3 year backstop for 5% rate. Greece on the other hand ar keeping their heads up high, not wanting to take the handout - yet. Today is the first day of reckoning with about 12 billion euros worth of Greek bonds being put out for sale. The sales response would be a very good indication and I expect the markets to take some direction from there.