Euro retreat mildly in quite trading today on report that Germany is holding back the decision on another Greek bailout. Government spokesmen said that Germany will wait for the Troika report to be expected on Wednesday first. Steffen Seibert emphasized that the second bailout of EUR 60b are options but not commitments and “German payments must be decided by German authorities. Finance Ministry said that additional funding for Greece need to come from the EUR 750b EFSF bailout fund. Meanwhile ECB Executive Board member Bini Smaghi expressed his objection to debt restructuring and warned that “imposing haircuts on private investors can seriously disrupt the financial and real economy of both the debtor and creditor countries”. Bini Smaghi warned that restructuring should only be the “last resort.”

Also in investors mind is how private-sector creditors would be involved to share some of the burdens. It’s reported that there are some disagreements between ECB and Germany over the issue. Berlin would prefer the “reprofiling” option, a plan that private bond-holders would exchange existing Greek bonds for new bonds with a longer maturity, at seven years beyond the current expiry dates. On the other hand, ECB prefers just to “rollover” the current bond holdings. This would likely be one of the focus in near term in the Greece situation.

Philly Fed Plosser, a known hawk, said that the weak job data released last Friday, which “disappointing, certainly”, doesn’t change the outlook of the US economy. Plosser continued to promote that Fed should exit from stimulus measures “long before” assured recovery in the job markets and “somewhat tighter monetary policy is possible by the end of the year.”

On the data front, Canadian building permits dropped much more than expected by -21.1% mom in April. Eurozone PPI rose 0.9% mom, 6.7% yoy in April, slightly above expectation of 0.8% mom, 6.6% yoy. Eurozone sentix investor confidence dropped sharply to 3.5 in June. Australian inflation expectation rose 0.2% mom in May.

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