GREcovery Interrupted: Greek Deflation Worst In 50 Years

Attention this week was focused on Europe's overall (disappointing) 0.7% inflation print - which sent Draghi back to drawing board - despite the world of sell-side strategists exclaiming that Europe has turned the corner and now is the time to load the boat. However, quietly out of sight for the mainstream, Greece just printed its worst deflation data on record. Consumer prices fell 2.0% on an annual basis as a combination of deep recession, wage cuts, and substantial spare capacity squeeze prices lower. Additionally, we already showed the dismal demise of the macro picture across the European union - heading in a very different direction that the stock markets.. but now, bottom-up, earnings are collapsing too... so remind us again why Europe is a "strong buy?"

 

So EU inflation is slumping despite years of easy policy...

And peripheral deflation is the worst on record...

 

Top-down, Europe is ugly...

 

and no bottom-up earnings are collapsing too...

 

Buy, Strong Buy, Or Buy It All?

Charts: Bloomberg and @Not_Jim_Cramer

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