Here we go again

Hang on a minute
When the Queen visited the German president yesterday he presented her with an unusual painting of her youthful self astride a blue pony. She didn't look happy. When the Geek prime minister visited the Eurogroup yesterday they presented him with the usual demands. He looked as happy as ever.

Contrary to the story put around on Tuesday euro zone finance ministers were not, after all, delighted by the proposals set out by the Athens government. To prove the point they "leaked" a copy of the document, heavily annotated - in red - with the amendments they required. The Eurogroup will reconvene today in the hope of boring Mr Tsipras into compliance with their demands.

In keeping with their earlier reaction to the prospect of a deal being struck, investors reacted to the prospect of a breakdown in negotiations by selling European equities and buying the euro. It strengthened by three quarters of a cent against sterling and added a third of a US cent. The Japanese yen and the Australian dollar made proportionally-similar gains.

The last shall be first
Wednesday's top-performing currency was the NZ dollar, which staged a technical recovery from a five-and-a-half-year low. Sterling shared the wooden spoon with the Canadian dollar. Nobody knows why.

Having slowly bottomed out over the last week the Kiwi broke back above resistance to achieve a two-and-three-quarter-cent rally against the pound, making it the day's unchallenged leader. There were no NZ economic data to help it on its way: investors simply decided its two-month decline had gone far enough.

There was no clear reason for the market's relatively harsh treatment of the pound and the Loonie. Both fell by an average of -0.5% against the other dozen most actively-traded currencies despite there being no adverse ecostats from either country. Nitpickers might argue that the 42.5k mortgages approved by British lenders were fewer than expected but they still constituted a 14-month high. Investors might well reconsider those selling decisions today.

Groundhog day
Another day, another Eurogroup meeting. It is impossible to guess whether euro zone ministers are gathering today out of sheer desperation or because they believe a deal with Greece is at hand. The element of doubt has returned.

Investors remain optimistic that an agreement will be reached, as do the European Union's leaders, who begin a two-day meeting today. For goodness' sake, they are only quibbling about a couple of billion euros: the European Central Bank is printing that much money every day in its quantitative easing programme.

Aside from the troika's discussions with Greece today's agenda also includes UK retail sales (the CBI version) and US figures for jobless claims, personal income and spending and provisional purchasing managers' index readings. None of those is sufficiently important to distract investors' attention from the wearisome yet strangely compelling goings-on in Brussels. There is every chance that today's developments will not be noticeably different from those of three or four months ago.