No Greek Debt-Swap Agreement To Be Reached This Week, Eyes To Track Jobs Report And Services Data

Another week has passed without seeing an agreement between Greece and private sector bondholders over the size of losses to be bared by creditors and interest on the new loan.

Athens is struggling to reach a debt-swap deal, raising concerns the debt-mired nations may face default as early as in March when 14.5 billion euros of debt matures.

A report by Bloomberg on Wednesday said Greece and its creditors may reach an agreement with a loss of 70% for a lower borrowing cost of 3.6% instead of 4.25% on 30-year bills, where, in return, a rebound in Greek growth would make the pay to bondholders higher as a compensation for accepting a loss in net present value terms by an estimated 0.5 to 3 percentage points.

Josef Ackermann, chairman of a banking group in negotiations with Greece, said on Thursday a deal with private sector creditors may take place “in the next few days.”

However, it seems that even if a deal is reached, this will not be the end of trouble or a serious step toward solving the Greek debt agony as it will continue its trip of repaying debt over the coming years while cutting spending and raising taxes further to become eligible for receiving a second bailout worth 130 billion euros.

Greek Prime Minister Lucas Papademos is currently looking for support from political leaders to launch further austerity and reforms needed to convince international lenders to give Greece a second bailout announced in October.

With no agreement reached so far, the euro is heading for a weekly loss versus the green currency this week after rising the previous two weeks.

Today, leaders of AAA-rated nations Germany, Netherlands, Luxembourg, and Finland will meet in Berlin to tackle debt-related issues.

Regarding fundamentals from Europe, after the release of upbeat manufacturing data from major economies this week, eyes will track the progress in the services when Germany, euro area, U.K. and U.S. release services data.

Services data from China released today showed that the expansion pace eased to in January to 52.9 compared with the prior reading of 56.0.

Yet, the main highlight of the day will be the awaited non-farm payrolls report from the U.S. due at 13:30 GMT. The change in non-farm payrolls is predicted to retreat to 140,000 in January from 200,000 in December, while unemployment will linger at 8.5%

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