FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
Headline risk continues to prevail but admittedly yesterday’s comments from the Eurogroup and Ecofin meetings failed to provide any new information. The powers that be appear to be waiting for political risk in Greece to clear before making any fresh commitments, but other pan-Eurozone matters are steadily being resolved, and the news of EFSF lending capacity expansion was much welcomed. Again, this was as expected but the market is starting to appreciate the lack of negative surprises. Nevertheless, the plans for Greece are not yet in the clear, with Fitch warning overnight that a debt exchange or voluntary rollover would be considered a default. Ahead today the Greek Parliament is due to hold a confidence vote, which we expect to carry in the wake of the recent cabinet reshuffle. The US economic data calendar is light again on Tuesday, which is likely to keep the Eurozone firmly in the spotlight. Overnight the RBA minutes for June were released, and our economists note that these were materially more balanced than the May minutes and SoMP. We have pushed back our RBA hike view until October (from August) as a result. EURUSD traded 1.4303-1.4384 and USDJPY 80.09-80.35.
SCHEDULE
Please visit GCI’s Economic Calendar for a schedule of market news and events.
