Greece, deflation or hyperinflation?
- Greek inflation is due for release. A swift comparison of Greek and German inflation underscores the fact that the Euro is not working. Greece is the one Euro area country that can truly claim deflation – although if Greece were to leave or half leave the Euro area there is a risk that the Greeks would be saying hello to hyperinflation.
- Greece presents a plan by midnight tonight (why are the EU deadlines always midnight?). It needs to satisfy the European creditors (and the Bundestag of Germany) that it will honour the plan. It needs to convince Greek bank depositors that Greece stays in the Euro. This seems a difficult task.
- Chinese equities have at last responded to countless policy attempts to "guide" the market and around 40% of stocks suspending trading, and the market has seemingly stopped falling. Whether this is a good thing or not depends on where one perceives fair value.
- The Fed minutes from the US were consistent with rate hikes this year, as were the comments from San Francisco Fed President Williams. We have two more speakers today, although this is all something of a warm up to remarks by Fed Chair Yellen tomorrow.