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Rationality returns

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  • The better US labour market data led to a better market response on Friday. Investors seem to be coming around to the view that stronger economic numbers mean a stronger economy as well as a Federal Reserve that will adjust policy appropriately.
  • The Eurogroup meet (there's an inspiring way to start a sentence). Greece is on the agenda, with the Greeks optimistic that they will receive their next cash payment. An IMF official was sounding more constructive over the weekend, although the Greek Parliament will probably have to vote on job losses.
  • In japan bank lending increased in the month of May �€“ sadly nearly all the increase in bank lending was a rise in loans to local authorities, which are not generally known to be productivity boosting powerhouses in the Japanese economy.
  • The data calendar is pretty quiet. The UK gave some better business confidence data, Germany has industrial orders and the United States will be offering up consumer credit numbers. Egypt is also likely to remain a focus for investors.

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