All Things in Moderation

Vital Statistics:

Limited numbers out this morning. ADP employment, a precursor to the monthly employment data due out on Friday, came out on the screws (insider lingo for “as expected”) at +216K, with some minor upwards revision, +3k, to last months number. Non-farm productivity came in slightly higher than expected at .9%, and Unit Labor Costs significantly higher, at 2.8%, up from 1.2% from last week.

Greece remains a focus, as we wait for private bondholders to decide whether to accept the negotiated deal. The deadline to respond is tomorrow, but still no confirmation on when the results will be conveyed publicly. It will be interesting to see the implications for credit default swaps written on Greek debt if some of the bondholders are forced into the the agreement. Does this constitute a “credit event” triggering CDS payouts? ISDA (the International Swap Dealers Association) has said no, but also says that the situation is “evolving”. We shall see.

Equities are slightly up this morning across the globe, after yesterday’s drop down. Rates remain mostly stable after a significant rally yesterday, particularly in the longer end.

GM and Chrysler have announced plans to market LNG pickup trucks.  The current cost of NG per BTU is eight times cheaper than oil. – Mark 

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