Next Week’s News Today: A Greek Tragedy Unfolds

Singapore’s stock market will have to fly solo on Monday. It is Memorial Day in the US, which means that there will be no trading on either the New York Stock Exchange or NASDAQ. Many of Europe’s stock markets will be shut too, for a public holiday.

But just because US investors will get to enjoy a duvet day doesn’t mean that we can have a lie-in too. Here in Singapore we get to digest the latest monthly inflation-rate numbers from Statistics Singapore. Could it possibly be six straight months of deflation, when the numbers are released on Monday?

Staying with inflation, Japan is pencilled in for inflation numbers next week too. Last month the Ministry of Internal Affairs & Communications said consumer prices rose 2.3% in March. The biggest price increases were seen in foods, which climbed 4.2%. Food is the single largest component of Japan’s inflation basket – it accounts for nearly a quarter by weight.

Meanwhile, we will get another glimpse at how well the Japanese economy is doing. This week, Japan said its economy expanded more rapidly than expected between January and March. It grew 2.4% on an annualised basis, which was faster than forecasters had predicted. It sent Japanese stocks to a 15-year high. The Lyxor ETF Japan (Topix) (SGX: CW4), which tracks the TOPIX index, has returned 17% this year.

While any expansion is better than none, much of the growth in Japan in the first quarter came from corporate investments. But for Japan’s recovery to be truly sustainable, consumer have to start splashing their cash too. We could find out next week whether they have been opening up their wallets.

According to the German Chancellor, Angela Merkel, Greece has until the end of next week to reach a deal with creditors. Optimists believe that an agreement could be struck between the Mediterranean nation and the European Union. Everything could hinge on a new sales-tax proposal, which will be presented by Greek Prime Minister Alexis Tsipras. Fingers crossed.

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