Greek bonds are down sharply again with their 10 yr yield rising 24 bps to 5.70%, up 83 bps in 2 weeks and at the highest level since April and their 5 yr CDS is at the highest since March due to the lack of faith in the plan laid out by Greece’s PM. It will be a battle royale between the public unions and the government (sound familiar). The spread to the German 10 yr is widening to 253 bps, double the level in Sept. In response, the euro is falling to the lowest level since early Oct. Investor confidence in Germany’s economy 6 months out (ZEW) fell in Dec but was a touch better than expected. Inflation data in the UK, Spain and France were about in line with expectations ahead of US PPI today and CPI tomorrow. We also see today the first Dec industrial # in the NY Fed survey, Nov IP, Oct TIC data and the Dec NAHB survey. The FOMC begins their two day meeting where how nice would it be to be a fly on the wall.
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