The chips are increasingly hitting the table in the poker match between Greece and its private sector bond-holders.  Some higher profile banks have acquiesced to the haircut terms already agreed upon in frantic 11th hour Eurogroup meetings 2 weekends ago.  Other entities are demonstrating sterner poker faces, effectively calling Greece's bluff that collective action clauses will be invoked if merely 2/3rds participation is attained. 

That could mark the inception of an ugly domino event for the entire Euro-zone as it makes the current semi-orderly default very disorderly indeed.  "When combined with the strong likelihood that a disorderly Greek default would lead to the hurried exit of Greece from the euro area, this financial shock to the ECB could raise significant stability issues about the monetary union," according to an IIF document obtained by Reuters.  The Full Story is an excellent read.

Not to put too fine a point on it, we're basically watching Greece wait for it's creditors to agree to heavy losses while threatening those hesitant to do so with, well... "heavy losses" AND "Euro-zone catastrophe."  Today's earlier rumors that Thursday's bond swap deadline wouldn't garner sufficient participation and its potential delay helped fuel the bond market rally and stock sell-off.  Indeed if the Greek bond-swap situation deteriorates further and if that deterioration coincides with lackluster domestic employment data, it would be sort of a perfect storm for more of the same bond rallying and stock selling.

Of course that's just one of the eventualities and the opposite, or something close to it, remains almost equally on the table.  We'll begin to know more about such possibilities this morning with ADP private payrolls, previously at 170k, but seen this month at 208k.  Half an hour later, Unit Labor Costs are expected to be unchanged for the Q4 while productivity is expected to have risen from 0.7% to 0.8%.  The last piece of moderate important economic data, Consumer Credit at Noon, is seen contracting from December's big 19.31 bln to 10.0 bln in January.  Unless the latter reports really miss their consensus estimates, and as loathe as we are to say it, ADP private payrolls looks like the headliner.