US Treasury Secretary visits Germany

- Italy pays less than 6% for ten-year loans
- UK retail sales rise more slowly

On Thursday, in his "Whatever It Takes" speech, European Central Bank President Mario Draghi likened the euro to a bumble bee "because it shouldn't fly but instead it does". Since then Jonathan Neal, Associate Professor of Entomology at Indiana's Purdue University, has helpfully shed further light on Sig Draghi's analogy. To paraphrase his "Bad Insect Metaphors" blog: A bumblebee flies only by dint of great effort. To stay in the air it must constantly flap its wings. The moment it stops flapping it falls out of the sky.

The comparison to the euro is evidently more accurate we thought. Yesterday's bit of flapping was stimulated by US Treasury Secretary Tim Geithner, who paid a flying visit to German Finance Minister Wolfgang Schäuble at his holiday home. After the meeting they issued a statement similar in tone to those of the ECB president and the French and German leaders, citing "the need for ongoing international cooperation and coordination to achieve sustainable public finances, reduce global macroeconomic imbalances, and restore growth." Mom and apple pie were taken as read.

So now the doing-everything-it-takes movement has gathered all the signatories it is likely to get and investors are waiting with bated breath to find what "everything" is. There has even been a suggestion that there could be a contribution from the Federal Reserve after tomorrow's policy meeting, unlikely as that might sound. In reality though, nothing is likely to happen until Thursday's ECB Governing Council meeting. And even there, investors are moderating their expectations. 

In the meantime, life for the euro goes on in its typically flappy way. There was jubilation yesterday when Italy borrowed €5.5bn through the sale of ten-year government bonds at an interest rate of "only" 5.96%. EU confidence measures surprised nobody when they all deteriorated in July. Consumer confidence at -21.5 was the lowest reading in almost three years.

Not that UK consumer confidence was any greater. Gfk reported an unchanged -29, vaguely in the middle of a range that has been negative for five years. The CBI's Distributive Trades Survey produced a reading of 11% in July, positive but not as strong as investors (or shopkeepers) had hoped.

Overnight the NBNZ index of New Zealand business confidence improved by two and a half points to 15.1%, and a net 24% of firms said they expected activity to increase in the coming year. Australian building permits fell by a monthly -2.5%. Japanese housing starts were down by -0.2%. German retail sales rose by 2.9% in the year to June but were down by -0.1% on the month. 

This morning Euroland announces inflation and unemployment figures, projected to be 2.4% and 11.2%. Greek and Spanish retail sales numbers will probably not be a pretty sight. From Canada after lunch come factory gate prices and one month's worth of economic growth data. America reports on personal income and spending, consumer confidence, house prices and the Chicago purchasing managers' index. 

Currencies were quiet on Monday, with net moves of no more than a dozen ticks or so between the pound, the yen, the euro, the franc and the US dollar. The commodity-related currencies put in the best performances but even there the gains were of well under a cent. Expect more of the same today.