Overnight Sentiment

As mentioned last night, the early ES and FX openings showed market sentiment unimpressed with the G20 as that was the main event over the weekend, since the opening, it's been pretty much downhill all night as the G-20 did not increase IMF reserve, something that is a fairy tail we have covered so many times. The agreement to increase funding was made over a year ago, but only 19 countries in the IMF (not the G-20) have ratified the new increases, the biggest contributors have not including the US. Furthermore even if the US had, there's already strong Congressional sentiment that no more IMF funding be used in Europe. Even Geithner said after the G-20:

"We will not go to Congress to seek the authority necessary for a contribution from the United States. We don't think that's necessary or desirable."

He knows what the result would be. Furthermore last week Canada said boosting the IMF for Europe WOULD NOT be on the G-20 agenda. If this is the market acting surprised or disappointed over that point, then very few in the market have been paying attention or they are simply living on unlikely hope.

In similar news, the German Bundestag will vote today on the second Greek bailout, (remember last week all the headlines that Greece was saved?) a reminder that each of the Euro-zone creditors must independently back the bailout with their own parliamentary votes as well as the IMF in its role. Germany's Finance Minister reminder us of such after the G-20

“As the heads of government have agreed, we will make our decision in Europe in the course of the month of March. But the month of March goes from March 1 to March 31. It will be reviewed again, also in the light of the developments that have since occurred, whether the stated dimension of the mechanism is enough or not.”

If it takes until March 31^st with no bridge loan, Greece will already be in default.

Schaeuble also reminded us that we can safely assume that the Bundestag will approve what the German government has laid out which may lead to some volatility today.

The British Finance Minister reminded the EU that the IMF will not decide on its participation until they see what the EU comes up with, so as always, it seems to be a time consuming game of wait to see who will be the first to do what before deciding on anything; that is assuming Greece meets the pre-criteria.

In short, the headlines from Bloomberg and Reuters sum up the situation, the EU has been rebuffed by the G-20.

In Greek news, over the weekend, news broke that Greek officials in government have transferred more then 16 bn euros of private wealth out of the country, apparently not having much confidence in the outcome there, which has inflamed the German population as news paper editorials are making all too clear this a.m., despite this, it is still widely expected that Germany being the first EU nation to vote on the Greek package will pass it today.