Good morning

	High	Low			High	Low
EUR/USD	1.1406	1.1313		USD/ZAR	11.7530	11.6025
GBP/USD	1.5413	1.5364		GBP/ZAR	18.07	17.83
EUR/GBP	0.7406	0.7358		USD/RUB	65.35	61.43
USD/JPY	119.36	118.87		USD/NGN	200.2	199.5
GBP/CHF	1.4601	1.4445		S&P 500	2,111	2,104
USD/ILS	3.8805	3.8045		Oil (Brent)	60.53	59.51

The subject line says it all. Today is my birthday (party) and I’ll….

Moving on to more important matters. So the Greeks have finally “lost the battle, but the war goes on”. So much for sticking to their anti-austerity manifesto. It was kind of like getting cut off by another driver, screaming and shouting what you are going to do and then Floyd Mayweather steps out the car. Erm….I think an apology is forthcoming not to mention getting back into your car and driving away in one piece. The point I am trying to make, Greece threw their toys out the cot, threatened this that and the kitchen sink. But when the EU Finance Ministers stepped out the car, the Greeks knew the battle was over (for now). They HAD TO ACCEPT the deal that was on the table or risk pretty much losing everything. And I mean everything. When you run out of money and there is no one to help it becomes pretty difficult to keep a straight face and soldier on. Greece knew that if they took the EU to the cusp there was a real likelihood that the EU would have let them go their own way, default and leave the EU. The latter of course did not want that and therefore continued negotiating. However, ALL members of the EU have to be dealt the same deal otherwise it would open pandora’s box with Spain, Cyprus, Italy, France and who know who else going to the EU and saying we want a better deal too. That was simply too much to bear. So while the market awaits Greece unveiling her reform proposals the European market have opened positively though the EURUSD which recovered initially has since lost steam and is trading circa 1.1325….

The agreed extension of up to 4 months (Greece wanted at least 6) to the current programme is conditional on Greece delivering a clear reforms/austerity mandate. The present agreement will thus allow further negotiations between the parties (like I said the war goes on). It is understood that any further “handouts” of bailout funds will depend on being approved by the EU/IMF/ECB (towards the end on April).  Initially the Greeks will put forward a plan to root out tax evasion and overhaul the country’s labour laws (bringing them more in line with the rest of the EU). It is hoped that these plans will go a long way to satisfying and convincing Greece’s creditors that they are doing their bit and thus being granted the extension to the bailout programme. If the creditors are satisfied, the ECB/IMF will then release over €7bn in financial aid to the Greeks, money that is crucial to their survival. Any failure to satisfy the EU/ECB/IMF, could basically see Greece run out of money (end Feb) as it initially faces repayment of €1.5bn to the IMF made even more difficult by a continued run on the banks (talk of €1bn being withdrawn a day last week).

The Greek PM, Tsipras nevertheless remained defiant adding (in an address to the people on Saturday), his country would no longer be “asphyxiated” by austerity. “Yesterday’s agreement with the Eurogroup cancels the commitments of the previous government for cuts to wages and pensions, for firings in the public sector, for VAT rises on food, medicine. We averted plans by blind conservative powers, within and outside the country, to asphyxiate Greece on February 28,” he said. Fighting talk but for how long!! The ECB banned the acceptance of Greek bonds as collateral for loans earlier this month, forcing banks to rely on more expensive emergency liquidity help which has been stretched to its limits over the past week. At the current rate of deposit flight, Greek banks will run out of money in less two months not to mention the option of capital controls not be ruled out in Greece to stop the rot. Simply put there is still EVERYTHING TO PLAY FOR.

FX HEDGING: How many times have ParityFX said it. If you take the risk and don’t hedge your FX you could be staring down the barrel of a shotgun. Another report this morning (Telegraph) reporting that the “strength of the GBP knocked £2.7bn from British firm’s revenue(http://www.telegraph.co.uk/finance/economics/11427976/Strength-of-the-pound-knocked-2.7bn-from-British-firms-revenues.html). We reported many times of the past 6 months the importance of hedging. We have a terrific well written article titled (PARITYFX – FX SERVICES FOR SME) – please let me know if you would like a copy – though it can be found on our BLOG website www.blog.parityfx.com – ParityFX has a wealth of experience and expertise to ASSIST YOU WITH YOUR FX HEDGING. Let us know.

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