Greece Given an Ultimatum

Several differing comments out yesterday showed time is running out for Greece ahead of the June 30^th deadline for repaying the IMF and releasing bailout funds. Germany’s Angela Merkel is demanding an agreement before European markets reopen on Monday with Eurogroup President Dijsselbloem calling for an agreement by Saturday. They are upping the ante as negotiations go down to the wire with Greece refusing to compromise on key issues. In the most egregious tirade to be unleashed against the Greeks, European Council President Donald Tusk purportedly told Tsipras “game over” in relation to the bailout negotiations. Greece is firing back at creditors after calling the plans to gut the economy as extreme measures. No new proposals are expected today as name-calling dominates the newswires and increasingly aggressive demands are made. The Euro is presently trading sideways ahead of the European open as markets await new rumors of a deal.

Overnight data released from Japan showed that the Bank of Japan is struggling to stoke inflation in the economy despite the quantitative and qualitative easing efforts. National core CPI expanded at a 0.10% annualized pace versus 0.30% in the prior reading. The regular CPI fell from 0.60% to 0.50%, raising the stakes for the Central Bank as the inflation target grows more distant. There were several positive elements that should not be overlooked including the gains in household spending both month over month and year over year. Spending expanded at a 4.80% annualized pace according to the latest reading while rising 2.40% monthly. Unemployment held constant at 3.30% and is not expected to see any demonstrable gains in the near future. The Yen has strengthened moderately since the releases as the growing signs of diminishing marginal returns from monetary policies pressure the currency higher.