Greece seems ready to compromise

•     Greece seems ready to compromise

–    Cabinet approves a plan that is similar to one presented by the creditors last month, including tax increases and concessions on pensions.

–    Plan now goes to creditors, who will then submit it to Eurozone finance ministers

–    Probability of GREXIT now back below 50%, but still higher than it was

•     China stocks rally again = up around 10% in two days

–    Continued impact of government measures improve sentiment, although nearly half of    the stocks are still suspended so the real test is yet to come

•     Greek compromise, China rally boosts risk-on sentiment

–    Commodities gain, particularly oil

–    Dollar weakens despite higher Fed fund rate expectations. Commodity currencies are the best performers, while safe-haven JPY and CHF are the only losers

–    Whether it continues depends on what happens over the weekend with Greece and whether China stocks can continue to stabilize

•     Today:

–    Eurozone: French industrial production for June

–    Norway:  CPI for June

–    Canada:  unemployment for June

–    US: Wholesale inventories for May

–    Speakers:  Fed Chair Yellen to discuss the Fed’s economic outlook. First appearance since June FOMC meeting, ahead of her semi-annual testimony to Congress.