Clearly, the situation surrounding Greece and today's EU Summit in Brussels is dominating the news and driving FX pricing. However, the speed and divergence in official comments is mind numbing. Yesterday, there were reports that Eurogroup Finance Ministers and the ECB Council held separate teleconferences but no head lines were generated. The most recent round of comments came from an unnamed Spanish source that the EU send a clear message of solidarity on Greece, but details won't be finalized till Tuesday (repeated by a EU commission source). We believe that at today's meeting the EU officials will look to pull additional clarity on Greece's budget cuts before announcing any concrete steps later next week. In the short-term, we are still bearish on the EURUSD since we are skeptical of any bailout plan in the next few days. Left behind by the media frenzy over Greece was some encouraging data out of Asia. First was the Australian unemployment rate, which unexpectedly fell to 5.3% from 5.4% (a rise to 5.6% was exp). The AUDUSD rose sharply on the positive labor numbers to 0.8895, as the markets began to price in further RBA tightening in March. And, in China, weaker than expected inflation data, shockingly low at 1.5% vs 2.1% exp, helped easy worries that the PBoC would need to tighten rates further in the near term. On the data front, the highlight of the day will be the Initial jobless claims, since US retail sales release was delayed till tomorrow. Markets were expecting a 0.4% rise in retail sales but there is decent evidence that the market is underestimating the strength of the US consumer and we believe the skew is to the upside.

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