TheFXSpot: Mkt Weary Of Greek Talk, Tries To Eye Other Drivers 8  FEB   By Vicki Schmelzer New York, Feb 8 - Financial market players preferred the topic of the heavy snowstorm that blanketed the Mid-Atlantic and parts of the Northeast over the weekend or the outcome of Sunday's Super Bowl to yet another discussion of how Greek fiscal problems will play out. By Vicki Schmelzer New York, Feb 8 (MNI) - Financial market players preferred the topic of the heavy snowstorm that blanketed the Mid-Atlantic and parts of the Northeast over the weekend or the outcome of Sunday's Super Bowl to yet another discussion of how Greek (and other eurozone peripheral countries) fiscal problems will play out. There is widespread agreement that there is no easy end to the issues facing Greece or another of the other countries (Ireland, Italy, Spain, Portugal) that have increased their debt to GDP ratio to well beyond the 3.0% cap put in place under the Maastricht Treaty. It may be months before a "bailout" plan or some other solution is hammered out, whether by the European Union, or by the International Monetary Fund, as some analysts suggest may happen. Given these circumstances, it seems logical that the euro will remain under downward pressure, or at least sold on any major rallies, traders said. This is in sharp contrast to 2009, where starting in the spring, market players sought to buy euros on dips and were mightily rewarded for these long positions. As evidence that you can teach an "old dog new tricks," CFTC data, released Friday, showed that speculative accounts increased their net euro short position to a record short of -43,741 contracts, a bit larger than the prior record short at -40,654 contracts seen September 16, 2008. Since the inception of the single currency in January 1999, the market has been extremely reluctant to short the euro, which typically has seen solid demand on any of the major dips. Central banks were eager to diversify out of their hefty dollar holdings and global investors were keen to hold the "anti-dollar" that would protect them from ever widening U.S. deficits, traders explained. CFTC data has often showed speculative accounts holding a 50,000 plus net long (contract size) in the euro, but rarely showed positions with even a -30,000 contract net short. Despite the 10% plus slide in the euro since December 3 and the record net short positions in place last week that have likely grown larger, market players found it hard to be bold-faced euro bulls. "You still sell euros on rallies," said one U.S. trader. He said the details being unearthed recently regarding the debt problems in Spain, Italy and other EMU countries reminded the market of the skeletons that emerged from the closet about Bear Stearns and Lehman Brothers holdings. "It's eerily reminiscent of the subprime crisis," the trader said. Euro-dollar was ending the day at $1.3652 Monday, in the middle of a $1.3622 to $1.3714 range. Dollar-yen held at Y89.30 and cable at $1.5597, after trading in respective ranges of Y89.15 to Y89.56 and $1.5536 to $1.5660. Traders anticipated tight ranges this week, unless either U.S. or Chinese data releases surprise and prompt an FX reaction, which seems unlikely. Ahead of the Chinese New Year holiday (begins February 15), the market awaits a host of key Chinese data this week, including January PPI and CPI (February 11), fixed asset investment, retail sales, new loans data and industrial output (all February 10). Goldman Sachs China economists saw scope for January new loan levels to come in "as high as RMB1.35 trillion, (fourth highest on record, but not as high as the 1.6 trillion previously reported by the mainland media)." The economists also look for exports and imports to pick up due to Chinese New Year effects, with exports hitting 75% year-on-year. potentially. There may be some softening of the inflation picture, with CPI expected to moderate (likely temporarily) in January to 1.7% year-on-year from 1.9% (vs consensus at 2.1%), they said. "It will be interesting to see how markets react to the largely expected surging loan and imports growth, but possibly lower inflation prints this month," Goldman Sachs said. In the U.S., Thursday's release of January retail sales and December business inventories, along with Friday's University of Michigan consumer sentiment are viewed as key, but nevertheless are unlikely to lead to a widespread shift in sentiment. Currency markets Monday took their cue more from U.S. stocks, which again edged lower at the start of a new week, than commodities, where prices were attempting to stabilize, traders said. The S&P 500 closed down 0.89% at 1056.74, after trading in a 1056.59 to 1071.20 range. The CRB index settled up 1.15% at 261.52, after holding a 258.55 to 262.47 range. The S&P 500 posted a three-month low of 1044.89 Friday, before closing at 1066.19. The CRB posted a four-month low of 256.89 Friday, before closing at 258.55. At closing levels, the S&P 500 was down 8.1% from the 2010 high of 1150.50, seen January 19 and the CRB was down 11.0% from the 2010 high of 293.75, seen January 6/7. ** Market News International New York Newsroom: 212-669-6430 ** [TOPICS: MNEF01] 2/8/2010 4:35:00 PM