Now what?

No relief for the euro
News headline: "Rapper 50 cent files for bankruptcy". At least he didn't have much to lose. The same is not necessarily true of the euro, which was the poorest-performing major currency following news of an "agreement" between Greece and its creditors.

Today's newspaper headlines are almost unanimous in their condemnation of the deal struck yesterday morning. Comments such as "deceitful" (Daily Mail), "deal solves nothing" (Guardian), "popular backlash" (Independent), "devastated and humiliated" (Daily Telegraph) and "big fat Greek shredding" (Sun) echo the reservations of investors who spent Monday failing to rejoice at the demolition of Greece by the Troika.

Early knee-jerk gains by the euro were quickly reversed and the currency proceeded to lose a cent and a half to sterling and one and a quarter US cents. Investors were disappointed that the deal did not include provision for the swift reopening of Greek banks and that it failed to address the debt relief for the country which is widely-believed to be necessary.

No relief for the krone
The other negotiations apparently nearing closure yesterday were the even longer-running ones between Iran and the Western nuclear powers. After more than a decade of dispute about Iran's nuclear ambitions, it looks likely that Iran will be brought back into the fold, allowing it to export oil once more.

That possibility is putting renewed downward pressure on the price of oil and, in turn, is depressing the value of the Norwegian krone and the Canadian dollar. Neither currency is close to matching the euro's losses over the last 24 hours - the krone is down by just 0.7% and the Loonie by only half that much - but if a deal is announced both would be likely to fall further.

Other movers on Monday were the Swiss franc, which fared almost as badly as the euro, and the Japanese yen and NZ dollar, which matched the Norwegian krone's decline. There were no significant ecostats to influence the market until midnight, when the BRC Retail Sales Monitor indicated 1.8% annual growth in UK sales.

Inflation is the dominant topic on today's agenda. Germany opened the batting with one index of consumer prices 0.3% higher on the year and the other up by 0.1% The equivalent numbers for Spain were 0.1% and 0.0%.

Next up is Sweden, where forecasters have not ventured to guess what will follow the previous month's 0.1%. Then comes Italy, where the number is pencilled in at either 0.1% or 0.2%. The UK headline reading is expected to be a tick lower at 0.0%. Other European data cover German investor sentiment and Euroland industrial production.

After lunch America reports on retail sales. With consumer spending such an important contributor to US gross domestic product, the dollar's fortunes will hinge on whether or not sales continued to expand in June or if the strong growth in May was just a flash in the pan. A low figure would hurt.