Did you catch the Day Ahead? It turned out to be pretty timely. Here it is if you need it:
Since then, Greece has folded and unfolded several times, and hilariously at that!
First up, we had the other side of the negotiation table confirming what I laid out in the article this morning. In short, the powers that be are indeed prepared for Greece to exit. Here are a few wires:
RTRS- ECB OFFICIALS ARE PREPARING FOR GREEK EXIT FROM EURO ZONE – GERMAN MAGAZINE SPIEGEL
RTRS- ECB STAFF ARE PREPARING INTERNAL CONTINGENCY PLANS FOR HOW REST OF EURO ZONE COULD BE KEPT INTACT – SPIEGEL
(BFW) *GERMAN-LED BLOC WILLING TO LET GREECE LEAVE EURO
That kicked off a bull run for core bond markets, dragging overnight Treasury trading well into positive territory and resulting in a green open for MBS. From there, things just got silly. Most of the silliness is recounted in the featured comments below, but there’s one late entrant. It follows the almost unbelievably comical news that Greece claimed to have sent the wrong letter to the Eurogroup yesterday, and that they’d meant to send one that agreed to more of the conditions.
If that sounded unbelievable, there could be a reason. Or the reason itself could be unbelievable, depending on whom you wish to believe. Reason being, a Greek official subsequently said that no such letter was ever sent. Of course we have no idea who’s lying here, but that’s half the fun. TV and movie producers can only dream of drama this good.
The trading response remained fairly predictable. With each headline that suggested more compromise or a more likely resolution, bonds have lost ground. Each headline that makes an agreement seem unlikely has resulted in improvements. So far so good, though we’re still waiting to hear from Europgroup chief Djisselbloem who said earlier that he’d have something to say in a few hours.