Will they? Won’t they? Greeks & Germans disagree on agreement

•     Will they? Won’t they? Greeks & Germans disagree on agreement

–    Greek PM Tsipras says a deal is “close,” but German Finance Minister Shaeuble says he’s “surprised” by the Greek comments

–    Tsipras may be trying to calm people and stem the outflow of bank deposits after the ECB Wednesday declined to raise the amount of funds it supplies to the Greek banks

–    I expect Tsipras will have to give in, but whether he can get an agreement through the Greek Parliament is another question. EUR-NEGATIVE

•     Japanese retail sales disappoint; JPY weaker

–    Sales haven’t fully recovered since consumption tax hike last year

–    JPY weakness seems more connected with Australian capex figures (see below)

•     Australian capital spending plunges 4.4% qoq in Q1

–    Other industries apparently haven’t taken up the slack from the mining sector

–    Increases the likelihood of more RBA easing = AUD-negative

–    AUD/JPY fell on the news, but as AUD was weakening vs USD, JPY weakened too

•     Today:

–    Eurozone: Economic confidence expected to decline a bit in May, consumer confidence unchanged

–    UK:  Q1 GDP expected to be revised higher (+0.4% from initial estimate of +0.3%); likely to add to GBP strength

–    US: Initial jobless claims, pending home sales for April (not a major market mover)

–    Speakers: ECB’s Nowotny, Fed’s Williams & Kocherlakota