The highest estimate in this week’s contemporary art sales in New York is the $6 million to $8 million (£4 million to £5.3 million) asked for Jeff Koons’s 7ft, stainless-steel wrapped Easter egg. Sotheby’s insists that the estimate is less than half what it would have been a year ago and is a bargain.

So has the Koons market deflated by that much? It’s a question that has clearly been on the mind of British artist Jonathan Monk, whose latest exhibition, The Deflated Inflated, opens at the Lisson Gallery in London next week.

Two and a half years ago, approached by a collector who gave him carte blanche to make whatever he wanted, Monk chose to create a series of works based on Koons’s iconic 1986 sculpture Rabbit. The sculpture was a large stainless steel version of a child’s balloon and influenced a generation of young British artists, including Damien Hirst.

Monk’s latest series takes Koons’s Rabbit and recreates it in various stages of deflation. Now the series has taken on a new resonance in relation to prices in the contemporary art market. But whatever happens to the Koons sculpture at Sotheby’s, Monk’s work will not be affected. All five sculptures in the show, priced at $90,000 each, have been sold, subject to the collectors seeing the work when it arrives in the gallery.

Þ Sotheby’s chief executive Bill Ruprecht said the company’s Impressionist sales last week were “the most profitable in New York since last spring”. This was largely thanks to the virtual elimination of risky guarantees made to owners regardless of whether or not a work sells. Losses on guarantees cost Sotheby’s $10 million in one sale last November, and last week, the company off-loaded the risk on the only guaranteed work in its sale – Picasso’s pipe-smoking musketeer – by enlisting an anonymous third party to guarantee a price before the picture was offered for sale.

However, the fallout from guarantees is still being experienced, as unsold works, now owned by the auction houses, come back for sale. At Christie’s, a Chagall painting, L’événement, had been guaranteed with an estimate of $5  million last November and not sold. It returned last week and sold for just $3.6 million. Last May, a Léger painting, Le jeune homme au chandail, had also been guaranteed with a $3 million estimate and was unsold. Last week it sold for $1.7 million.

Þ Forty galleries have pulled out of the Frieze Art Fair, which will be held in London in October. The largest contingent is from the US, where 10 out of the 23 galleries which exhibited last year are not returning. However, such is the international status of the fair that the empty spaces have all been filled.