The Euro in the firing line once again
- FOMC Member Fischer Speaks
- FOMC Member Lockhart Speaks
- CNY New Loans: 1480B
- NAB Business Confidence: 4
The Greek government is searching for a conclusion to the ongoing talks regarding a new rescue programme. The talks are expected to finish today in order to allow national parliaments to pass the deal and give Greece access to funds ahead of a payment due to the European Central Bank on August 20th. The plan would free up nearly €86 billion to Greece.
Fed member Lockhart spoke last night and stated that economic conditions in the United States have largely returned to normal and a Federal Reserve decision to raise interest rates should come soon. He said “I think the point of lift-off is close," and that "the economy has made great gains and is approaching an acceptable normal condition." Meanwhile, in an interview with Bloomberg, Fed Vice Chairman Stanley Fischer said the U.S. economy had "nearly full employment but very low inflation." Fischer added that rates would not stay this low "forever". It needs to be remembered that an increase in rates usually has a time lag before the effects are felt in the market, thus an imminent lift is not out of the question.
Overnight China allowed its Yuan to fall to three-year lows as they intervened in the FX markets. China's Central Bank described the move as a "one-off depreciation" of nearly 2 percent and said it was based on a new way of managing the exchange rate that better reflected market forces.
- German ZEW Economic Sentiment
- EUR ZEW Economic Sentiment
- US Prelim Unit Labor Costs q/q
- US Prelim Nonfarm Productivity
- JPY Monetary Policy Meeting Minutes
German optimism had faded in July, with German economic sentiment depreciating to an eight month low. The figure has actually been deteriorating since March this year as the knock-on effects of a potential Greek exit has caused disharmony in the Eurozone’s powerhouse. Today’s figure however is expected to show a slight uptick to 31 from 29.7.