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Playing with Greek fire

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  • German Finance Minister Schaeuble was playing with fire ahead of today's emergency Eurogroup meeting, saying "it's over" for Greece if they do not do what he wants. Today's meeting could be considered an emergency meeting on Germany rather than on Greece, as reconciling both sides is critical.
  • This may all be political posturing, but the risk is that ordinary citizens take it seriously and react by pulling money from banks (bank runs are what tend to kill monetary unions). It is worth remembering that Greek fire was a real threat, and once ignited it was very hard to extinguish.
  • The US Federal Reserve seems to be on a bit of a mission to communicate impending rate increases, with Presidents Williams and Lacker clearly signalling a June hike to markets. Yesterday's data continued to suggest rising wage pressures in the US.
  • The data calendar today is pretty quiet. Australian consumer confidence picked up a little ahead of the labour report tomorrow - pertinent as investors try to gauge the extent of the Reserve Bank's likely easing cycle.