Less than 66% participation and even the CACs will be invalid, which would seem to scrap the entire Greek 2.0 package. The second long-term refinancing operation is thought to have helped strengthen the firewall, protecting Spain and Italy, and the sharp drop in yields in recent weeks have provided some cushion to absorb the shock, but there remains great uncertainty.

Second, the U.S. employment report at the end of the week is expected to show the third consecutive month of more than 200,000 job growth. The unemployment rate has fallen for five consecutive months, but the fact that this is not just a function of job growth, but also large numbers of people leaving the work force has tended to take the gloss off the numbers.

However, this has come under greater scrutiny and it appears there is a structural shift taking place. One study found that only about one-third of those leaving are classified as wanting a job. Only about one in seven of those leaving the job market is in the 25-54 age group, which is regarded as the prime employment age. The bulk of those who are leaving the job market and do not want a job are in the 55-plus age group. In turn, this would suggest the output gap may not be as great as those viewing the labor market developments in purely cyclical terms claim. The Mexican peso and the Canadian dollar have tended to react positively to strong U.S. data.

Third, at the end of the week China reports it monthly series that includes consumer and producer prices, industrial production, retail sales and investment. It is important that these reports are for the month of February and are expected to be cleaner reads after the Lunar New Year distorted the January series.

Nevertheless, we expect the data to confirm a gradual slowing of the economy, while more moderate food prices can see the CPI rate fall back under 4% from 4.5% in January. We look for the gradual easing of monetary policy. Meanwhile news that China plans to increase its defense spending by 11.2%, has grabbed media attention, though the growth rate is somewhat smaller than last year.