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Daily Agenda: Greece on Brink of Euro Exit

Factory orders in Germany show spike; health insurance company Anthem announces data hack.

The ongoing political tension between Greece and its fellow European Union members took a sharp turn yesterday when the European Central Bank raised restrictions on accepting Greek sovereign debt as collateral for short-term loans, effectively limiting liquidity for the nation’s financial institutions that lack sufficient other securities. With reports that Athens has only weeks’ worth of cash on hand to meet obligations without an extension of bailout funds due to expire on February 28. With Finance minister Yanis Varoufakis continuing to proclaim publicly that his government will reject any attempts to impose further austerity measures, the possibility of a Greek exit from the euro has suddenly become very real. The EU Ecofin meeting and EU leaders summit next week are not likely to be the key for debt markets as investors calculate the impact of the country’s potential departure.

German factory orders show uptick. A 4.2 percent rebound in new factory orders in December from a contraction of 2.4 percent in November was welcome news this morning, as the European Union’s largest economy attempts to find its feet. Headline index levels released by the Federal Statistics Office showed strong demand measures on both a domestic and export basis.

U.S. employment expected to post slight pickup. After a sudden surprise decline last week, U.S. initial jobless claims, due out today, are expected to rebound modestly as long-term labor markets continue to improve. The drop in continuing claims was equally dramatic last week at 71,000, bringing the total long term jobless level to 2.4 million.

Major health insurer hacked. In the latest major hacking incident, Indianapolis–headquartered health insurance company Anthem today disclosed that thieves had accessed client information. According to the company, personal data of up to 80 million individuals may have been compromised.

Apollo misses estimates. Private-equity firm Apollo Global Management reported fourth-quarter 2014 earnings that were 86 percent lower than the same period in 2013, signaling the problems facing the private equity industry, as maturing leveraged investments have been weighed down by a sour market in some asset classes. The company, which realized $0.04 per share compared to $0.94 during the three final months of 2013, is among the creditors battling over bankrupt casino operator Caesars Entertainment Corp. Also reporting earnings today is asset management firm Lazard, which announced a 14 percent year-over year increase in operating revenue. In Paris, BNP Paribas announced a surge in profits, although the firm guided lower for the year ahead on macro concerns. 

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