Britain May Be Forced To Bailout Greece

By: Alex Brandt

Highlights:
AUD/USD -  52.7K jobs added last month, unemployement drops to 5.3%
EUR/USD -  Resistance at 1.38

Chinese economic data right in line with expectations.

Eurozone Economic Data Today:

07:00 GMT: German wholesale price index for January expected +0.1% m/m
07:45 GMT: French survey of industrial investments
09:00 GMT: ECB publishes monthly report for February

EU meeting is the big event risk for today.

European stocks look set to open firmer.

All eyes are on the EU meeting today. Looks likely some assistance for Greece will be forthcoming, a debt guarantee at least. An article  from the British Telegraph reporting  that Mr Brown - when challenged in the Commons over Britain’s position - was unable to rule out Britain's involvement in a a Greek rescue package.  Costs for a total bailout package for PIGS is estimated to be about 60 billion euros. Greece alone will require 20 billion euros. 

Stating the obvious; a declaration that no assistance will be provided and the euro can expect to get hit pretty hard. Resistances of note are at  1.3815 and 1.3850 and likelihood stops above both levels, especially the latter. Traders have bid up the EUR/USD in expectation of a Greek resuce package.

The AUD/USD topped out at .8891, which was an impressive 140 pip rally for the session. There has been a lot of turnover between .8850/90 with plenty of corporate selling interest being filled. Shorts had no chance to cover their positions any lower as the market gapped immediately from .8770 to.8850 after the unemployment number. Some traders are speculating that the stronger employment data will more then likely mean that the RBA will raise rates next month.