The next last chance for Greece

Investors don't care
The Eurogroup meets in Brussels to examine new reform proposals from Athens. Chancellor Merkel warns that time is running out for Greece. No, it isn't Groundhog Day; that was five months ago. But so was the onset of the interminable stand-off between Greece and its Troika of creditors.

The euro has strengthened over those five months by an average of 0.7% against the other dozen most actively-traded currencies.  Investors are clearly not fearful that Greece will leave the euro or that, if it does, its departure will have any long-term damaging effect on the euro. Even now, a week after the supposedly final deadline, they are optimistic that Alexis Tsipras and his new finance minister will reach an agreement in Brussels this week.

Yesterday and over the last seven days the euro has edged higher on average. Compared with pre-referendum levels on Friday morning it is down by just two thirds of a cent against sterling and the US dollar. That is not evidence of investors selling the euro. It is evidence that they don't care, probably because after repeated cries of wolf they have yet to see for themselves any sign of danger.

Scandis split
The Northern Scandinavian crowns were at opposite ends of the league table on Monday. Sweden's krona narrowly beat sterling to the top position while the falling oil price took the Norwegian krone 0.8% lower for the day's biggest loss. There was little sense of urgency in the FX market.

Europe's ecostats were, by and large, ahead of forecast. German factory orders were down by less than expected. Inflation in Switzerland was -1.0% instead of the predicted -1.2%. Euroland investor confidence improved by a point and a half to 18.5, having been expected to decline to 15.0. Of the three delayed purchasing managers' index readings from North America, only two were better than expected. 

Investors couldn't get excited about any of them. The euro, the Swiss franc and the US dollar all lost a third of a cent to sterling. The Japanese currency lost four fifths of a yen and the Canadian and NZ dollars both lost around a cent. Australia's dollar hardly budged after the Reserve Bank of Australia left its benchmark interest rate unchanged at 2%.

UK output and Greece
There are ecostats this morning for Norwegian manufacturing output and UK manufacturing and industrial output. The US and Canadian trade figures come out after lunch, as does the NIESR's estimate of second quarter economic growth in Britain. Japan publishes its balance of trade data tonight. Of those, arguably the highest-profile numbers are the ones from the UK.

The Eurogroup meets this afternoon and the euro zone summit begins at seven this evening. Leaders have the opportunity to cobble together something that will keep financial markets calm, even if it means the orderly departure of Greece from the euro. But for that to happen they must avoid blowing up the Greek banking system.