Good morning. Here's what you need to know.
- Asian markets were mostly higher in overnight trading, with the Shanghai Composite up 1.25 percent reaching a three-month high. Europe is moderately higher and U.S. futures are modestly higher.
- The Greek parliament endorsed a bond swap for private debtholders late yesterday. The swap in which investors trade bonds for lower-value debt will be launched today, with the aim of shaving €107 billion off Greece's debt burden.
- The German economy grew 1.5 percent year-over-year in the fourth quarter, but contracted 0.2 percent on a quarter-over-quarter basis. Investment levels, especially in construction were good, while private consumption and exports were weak.
- Citigroup exited a seven-year old investment in HDFC, India's largest mortgage lender, selling its stake for $1.9 billion. Citi sold 145.3 million shares at a 6.2 percent discount to HDFC's closing price yesterday. This is part of Citi's move to shore up its capital.
- In earnings news, retailer JC Penney is expected to announce earnings of $0.67 per share. Newmont Mining reported a net loss $1.03 billion in the fourth quarter, after a $1.61 billion writedown of its Hope Bay project in Canada. Meanwhile, AIG posted a monster $19.8 billion fourth quarter profit. But profits were boosted by a one-time accounting change.
- Lloyds Banking Group reported a £3.5 billion pre-tax loss in 2011. This included a £3.2 billion provision for its payment protection insurance (PPI) scandal. Lloyds is 40 percent owned by the British government.
- Consumer sentiment data for February will be released at 9:55 AM ET followed by new home sales for January at 10 AM ET. Expectations are for a rise in the sentiment index to 73, and a rise in new home sales to an annual rate of 315K.
- Loads of economic data out of Europe, Spanish PPI rose 3.6 percent year-over-year in January, slowing for a fourth month. Meanwhile, Italian retail sales fell 1.1 percent month-over-month in December on a seasonally adjusted basis, and 3.7 percent year-over-year. And French consumer confidence rose to 82 in February, from 81 the previous month.
- The UK economy contracted 0.2 percent in the fourth quarter on a quarter-over-quarter basis, as companies cut down investment. Business investment fell 5.6 percent declining the most since the first quarter of 2011.
- Higher funding costs caused Fitch to downgrade three Australian banks. Commonwealth Bank of Australia, Westpac Banking Corp. and National Australia Bank were all cut by one notch to AA- from AA. This comes after S&P downgraded Australian banks back in December.
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