This week begins the same way last week ended, with Greece's negotiations with private bond-holders in focus.  Most recently this morning, the FT is reporting that Greece has rejected the EU's stipulation that an EU-appointed budgetary watchdog in Athens would make or break the deal.  Other than that, it seems that negotiations are complete (we assume somewhat successfully).  Here are several other relevant stories on the Greece topic:

(Reuters) - EU leaders will sign off on a permanent rescue fund for the euro zone at a summit on Monday and are expected to agree on a balanced budget rule in national legislation, with unresolved problems in Greece casting a shadow on the discussions.  The summit - the 17th in two years as the EU battles to resolve its sovereign debt problems - is supposed to focus on creating jobs and growth, with leaders looking to shift the narrative away from politically unpopular budget austerity.  The summit is expected to announce that up to 20 billion euros of unused funds from the EU's 2007-2013 budget will be redirected towards job creation, especially among the young, and will commit to freeing up bank lending to small- and medium-sized companies.

(Reuters) - Prime Minister Lucas Papademos sought backing on Sunday from leading Greek party leaders for painful and unpopular reforms that the near-bankrupt country must negotiate now that a long-awaited debt relief deal seems almost secured.  Attention is shifting to negotiations with Greece's international lenders who want proof that the Papademos coalition will take action on reforms before they hand over funds from a 130 billion euro bailout.  Greece needs the money to avoid a chaotic default when big bond redemptions fall due in March. However, in a sign that the talks will be tough, German Economy Minister Philipp Roesler openly called for Athens to surrender control of its budget policy to outside institutions if it cannot implement the reforms required under the euro zone rescue package.

(WSJ) BERLIN-Germany's finance minister issued an unusually blunt warning that the euro zone might refuse to grant Greece a fresh bailout, pushing Athens into default unless it persuades Europe it can overhaul its state and economy.  "Greece needs to decide," Wolfgang Schäuble said in an interview with The Wall Street Journal, when asked whether the euro zone would grant or withhold the second bailout package for the country since 2010, expected to be in excess of €130 billion ($172 billion).

In addition to the Greek Drama, it's an action-packed week in terms of domestic economic data as well, culminating in the big jobs report on Friday.  The calendar wastes no time getting down to business either.  Today kicks off with Personal Consumption Expenditures at 830am as well as the Midwest Manufacturing Index.  Bond markets are higher ahead of the reports, thanks to uncertainty over how the afore-mentioned Greek news will pan out.  MBS are 1/32nd away from all time highs, currently +6/32nds vs Friday at 103-28.  10yr yields have been hovering around 1.84.