EUR
News from Greece dominated yesterday’s news. Sources suggest Greece will ask
for a longer bridging loan, until September, and also propose new measures to
replace  what they consider the unacceptable parts of the existing
bailout. However there is no suggestion, yet at least, that European leaders
will back it the proposal. 

Rating agency Moody’s cut the credit rating on five major Greek banks, as fears

EUR
News from Greece dominated yesterday’s news. Sources suggest Greece will ask
for a longer bridging loan, until September, and also propose new measures to
replace  what they consider the unacceptable parts of the existing
bailout. However there is no suggestion, yet at least, that European leaders
will back it the proposal. 

Rating agency Moody’s cut the credit rating on five major Greek banks, as fears
over the country’s future in the eurozone continue to swirl.The Athens market
fell 6%, as bank shares suffer new double-digit falls. Fears that Greece might
default also drove yields high into dangerous territory; the three-year Greek
bond hit levels not seen since its 2012 restructuring.

Greek finance minister Yanis Varoufakis has warned that it would be catastrophic
if the eurozone collapsed. He said allowing the single currency to fragment
would be catastrophic stating it is the moral duty of the critics of the Euro
Zone to fix it, to make sure it doesn’t collapse because if it does the cost
will be immense not just for the Greeks but the Brits, everyone.

While concerns continue around Greece, Germany has exported more goods than
ever before. Data released yesterday showed, German seasonally-adjusted exports
hit a record high in December, up by 3.4% month-on-month, There was bad news
for foreign companies looking to sell to Germany – imports dropped by 0.8%
month-on-month. That helped to push Germany’s trade surplus to a record high of
21.8B Euros.

GBP
This morning George Osborne has warned that the risks of a very bad outcome
from the ongoing Greek debt crisis has risen. Speaking to Bloomberg TV he said
there is a growing danger that the deadlock over Greece’s bailout programme
spirals out of control, stating that it could potentially cause serious damage
to both the European economy and the UK economy.

Key Announcements:
GBP – 09:30 : UK Industrial Production (Jan) YoY
expected to fall to 0.7%from 1.1%
GBP – 15:00 : UK NIESR GDP Estimate (3M)

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