Man wins tennis match

No one really surprised
Sunday's European Council meeting was billed as the very last final ultimate deadline for Greece to surrender to the will of its creditors. True to form, the deadline has come and gone with still no decision as to whether or not Greece will remain a member of the euro. 

Sunday's story was that the Troika wants to collateralise any further bailout assistance. It is demanding that title to €50bn of state-owned assets be put into escrow in Luxembourg. For the moment, the Greek prime minister is saying he will not comply but it can only be a matter of time before he surrenders. (The next deadline is Wednesday, in case anyone cares).

By so promptly ignoring its result, Alexis Tsipras has made it blindingly obvious that his referendum last weekend was an ill-judged bluff. Investors assume that he will, in the end, do whatever it takes to preserve the euro. There is therefore only the merest hint of concern that Greece might leave the single currency and the euro has been the strongest-performing major currency over the last week, adding one US cent and rising by two cents against sterling.

Risk on, sterling up
The optimism about Greece and the euro coincided with a further recovery for Shanghai equity prices on Friday and again this morning. An acceleration in Norwegian inflation outweighed lower oil prices to put the krone in the lead but sterling was a close second.

Friday was a good day for the pound. It went up by an average of 0.6% against the other dozen most actively-traded currencies, halving its losses for the week. Sterling's gains included one US cent, half a euro cent and two and a half Japanese yen. Although there was no instant reaction to figures showing a narrowing of Britain's trade deficit in May, news of the smallest shortfall since June 2013 cannot have done it any harm.

The Canadian employment data were of no help whatsoever to the Loonie, even though they beat analysts' forecasts. Instead of the expected 10k job losses only 6.4k disappeared and unemployment was steady at 6.8% rather than rising to 6.9% as expected. The Canadian dollar lost two thirds of a cent in the following hour and is down by a cent and a half on from Friday morning's opening level.

As London opens there is news that an agreement has been reached between Greece and its creditors. The report is only from the twitterati but it sounds plausible.

Given the paucity of ecostats today (Portuguese inflation and the US monthly budget statement are all that is on offer) it will be handy that investors have something concrete to play with. Not surprisingly, the initial reaction of the euro has been positive.

The question is whether an end to the long-running Greek saga will take the euro higher or if investors will show it the same disregard they have for the last five months.