Financial markets waxed and waned yesterday with market sentiment dampened by the non-eventful G-20 meeting. Moreover, although Germany's lower house approved the second Greek bailout package, S&P's cut the credit rating of the debt -ridden country to 'selective default. Amid concerns over the pace of economic recovery, crude oil prices declined after soaring to multi-month highs last week. The front-month contract for WTI crude oil fell to 107.27 before settling at 108.56, down -1.10% while the equivalent Brent crude contract plunged to 123 before ending the day at 124.17, down -1.04%.

Germany's lower house approved the second Greek bailout package at 496-90 votes and 5 abstentions. However, a number supports came from the opposition parties, suggesting Chancellor Angela Markel has lost some support from her centre-right coalition partners. After the meeting, the Chancellor stated that the risks associated with a Greek default and exit from the euro were 'incalculable, and therefore indefensible'. G-20 officials said that the Eurozone countries should strengthen their financial firepower before other countries would commit funding to help resolve the sovereign debt crisis. This suggested that Germany, which has been the largest investors of the bailout funds, would have to increase its funding even more. However, as Merkel has lost some support from her partners, it appears that Germany would be more reluctant to further fund EU stabilization funds.

Despite the new bailout fund, Greece's outlook has not turned any better. S&P's downgraded the country's credit rating to 'selective default', following Fitch Rating's downgrade to C and Moody's warning of a reduction to the lowest rating. Yet, European officials continued to defend Greek by said that the cut has 'no impact in the Greek banking sector as its liquidity effect has been address by the Bank of Greece and consequently by the EFSF'.

Concerning the dataflow, pending home sales surprisingly rose +2.0% m/m in January, following a decline of -3.5% a month ago. The market had anticipated a milder gain of +1.0%. in the NY session today, durable goods orders probably contracted -1.0% in January after rising +3.0% in the [prior month. Excluding transportation, orders probably stayed flat from last month. Consumer confidence index is expected to have risen to 63 in February from 61.1 in the prior month.