Panic over

Euro resilient
It is impossible to imagine Greece making its €1.6bn repayment to the International Monetary Fund today. Even if every resident chipped in to draw the maximum €60 from their bank account they would still come up with less than €700m. Yet it looks as though investors couldn't care less.

Although the initial reaction of investors yesterday morning was to sell the euro, by the time London opened there had already been a reassessment of the situation and the single currency was on the road to recovery.  During the remainder of the day and overnight the euro won back all of its earlier losses. It starts today almost unchanged from Friday morning's levels against the pound and the US dollar.

Investors' relaxation does not extend to stock markets, which fell back in the afternoon after rallying in the morning. As far as the currency is concerned, however, they are in no hurry to turn a crisis into a drama. It could be that they still expect a solution to be found. Perhaps they were already well-prepared for this outcome. Maybe they foresee Euroland ex-Greece as a more robust currency bloc. Or all of the above.

The boring stuff
As noted yesterday morning there were a few economic data to entertain investors who were fed up with the wall-to-wall media coverage of Greece. They didn't have much influence on currency movements.

 In Spain retail sales were up by an annual 3.4% while in Norway they fell by that much in May alone. Personal loans in the UK increased by more than forecast but mortgage approvals were unexpectedly fewer. Consumer confidence in Euroland was steady and it improved slightly in Britain. New Zealand business confidence deteriorated slightly and Australian private sector lending increased by a respectable 0.5% in May.

The euro's two-cent gain made it the top performer, closely followed by the Swedish krona, and the Canadian dollar brought up the rear, losing a cent and a quarter to the pound. Sterling fell by an average of -0.3%.

GDP CPI and Greece
The finalised figures for first quarter gross domestic product are expected to show the UK economy expanding by 0.4%, rather than the 0.3% reported previously. Euroland's provisional consumer price index data should show inflation accelerating to 0.3%.

Germany opened the batting for Europe with 0.5% monthly increase in retail sales. France followed up with a -0.5% fall in producer prices and an above-forecast 0.1% rise in consumer spending. Other data this morning cover German, Italian and Euroland unemployment, Italian producer prices and inflation and Greek retail sales. The afternoon brings monthly GDP growth in Canada, the Chicago purchasing managers' index and US figures for metropolitan house prices and consumer confidence. 

The Australian manufacturing PMI comes out tonight, by which time there is likely to be confirmation that Greece's cheque to the IMF was not, after all, in the post. That eventuality should by now be priced into the euro. Beware of other surprises though.