International Monetary Fund

it has been a rather quiet session, which saw Japan modestly lower dragged again by a lower USDJPY which hit fresh 17 month lows around 170.6 before staging another modest rebound and halting a six-day run of gains; China bounced after a slightly disappointing CPI print gave hope there is more space for the PBOC to ease; European equities rose, led by Italian banks which surged ahead of a meeting to discuss the rescue of various insolvent Italian banks, while mining stocks jumped buoyed by rising metal prices with signs of a pick-up in Chinese industrial demand.

As we predicted last week when Wikileaks released an IMF transcript which suggested trubulent times may be ahead for Greece, Reuters today writes that "the leaking of a conference call of International Monetary Fund officials on Greece's latest bailout review has further undermined mutual trust in fraught debt talks, embarrassed the European Commission and infuriated the IMF and Germany."

Unlike yesterday's overnight session, which saw some substantial carry FX volatility and tumbling European yields in the aftermath of the TSY's anti-inversion decree, leading to a return of fears that the next leg down in markets is upon us, the overnight session has been far calmer, assisted in no small part by the latest China Caixin Services PMI, which rose from 51.2 to 52.2 (even if the employment index dropped to a three year low, suggesting China's labor problems are only just starting).

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Varoufakis said that Schäuble, Germany’s finance minister and the architect of the deals Greece signed in 2010 and 2012, was “consistent throughout”. “His view was ‘I’m not discussing the program – this was accepted by the previous [Greek] government and we can’t possibly allow an election to change anything.

 

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• Fed's Evans says market more pessimistic on U.S. rate hikes (Reuters)
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• Time Is Running Out (Again) for Greece (BBG)