Greece will prioritize debt repayments to the International Monetary Fund

Good Morning,

- The dollar hit an 11-year high as the dollar index rise to as high as 95.505, a peak not seen since September 2003.

- Asian stocks trade higher on Monday as China cut interest rate.

- February saw a further softening in UK annual house price growth to 5.7%, from 6.8 % in January. This is the sixth month in a row in which annual growth has moderated, with house prices declining by 0.1% month on month. The broader economic backdrop has remained supportive of housing market activity.

- Credit Agricole on EUR/USD: Regardless of receding Greece tensions, EUR will remain under pressure this week as investor focus shifts back to the Eurozone’s still weak relative fundamentals. The contrast between ECB easing and looming Fed tightening is perhaps now even clearer in the wake of the Fed testimony last week. We see little scope for next this’s February CPI to stabilize given recent price developments. In turn, this suggests that ECB President Draghi will maintain an aggressive monetary policy stance, keeping the door open for additional policy action even. This stands in contrast to the Fed that appears to have clarified the body of evidence required for their initial tightening. Given the looming US payrolls release we are more comfortable, not less, with our short EUR/USD position. Weak inflation to keeps ECB aggressive.

- Greece will prioritize debt repayments to the International Monetary Fund, some of which come due in March, but repayments to the European Central Bank are «in a different league» and will need discussion with Greece's creditors, the country's finance minister said Saturday. In an interview with The Associated Press on Saturday, Yanis Varoufakis also said Athens intends to start discussions with its creditors on debt rescheduling in order to make the country's massive debt sustainable.

- Newspaper Il Sore citing unnamed Eurozone sources: ECB may start buying securities as part of its QE programme on 9 March. ECB will probably raise GDP growth estimates 5 March. ECB will probably reduce inflation estimates for 2015.

- Fed’s Williams: The U.S. economy will be operating at “full employment” by the end of this year as the unemployment rate drops to 5%.

- Feds Fischer: High probability of a rate hike this year. Zero rates are far from normal, expects inflation to rise once energy impact falls. Discussion going on about dropping patient, dropping patient means fed can hide at any meeting. The dollar strong as a result of the strength of the economy.

- Revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan's final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.

- The China’s Yuan slid to the weakest level in more than two years after the central bank cut interest rates for the second time in three months. The move to join global counterparts with more easing reflects the People’s Bank of China’s concern over an economy pressured by a property slump, tighter controls over local government debt and capital outflows.

- Manufacturers in China saw a renewed improvement in overall operating conditions in February, with output and total new orders both expanding at faster rates. However, latest data indicated that external demand was relatively weak, with new export business declining for the first time in 10 months.

- Australia’s gold output has hit its highest level in 11 years. The production of gold rose by four per cent in 2014 to 284 tonnes, its highest level since 2003.

- Watch today: EU inflation, EU jobless, US manufacturing.

Have a nice Week !