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Grexit averted, focus turns to UK data and rhetoric surrounding rates

Last week we saw a partial resolution for Greece as they were granted a bridge loan and the ECB raised the emergency liquidity assistance. Whilst this does not solve the problem entirely, it does put the subject of Grexit on the back burner for the time being. In the meantime, Greek PM Tsipras reshuffled his cabinet ahead of a second parliamentary vote on Wednesday and the IMF called for some debt forgiveness. However, Merkel said she was prepared to discuss this only after the ESM deal had been negotiated, but again ruled out any haircut to the nominal level of debt. The question is, how long can this situation remain sustainable?

Meanwhile, looking at the data on Friday and over the weekend we saw a mixed bag from the US. The housing sector continues to improve with both building permits and housing starts not only increasing on the previous month but also beating forecasts. However, the University of Michigan’s consumer survey was revised lower.

Looking to the week ahead:-

Monday 20th July 2015

Fairly quiet today with much of the focus on Greece as they open their banks to provide limited services today. Meanwhile US Treasury Secretary Lew is due to speak about the importance of financial reform at the Better Markets' event, in Washington DC.

Tuesday 21st July 2015

With discussion starting to arise about a UK rate hike around the turn of the year, the market will be paying attention to data from the region. On Tuesday the UK Public Sector Borrowing Figures are due for release.

  • UK Public Sector Borrowing 

Wednesday 22nd July 2015

The BoE minutes and voting pattern will be under scrutiny today after BoE Gov Carney suggested that interest rates could increase at the turn of the year. The market will decipher the minutes for clues on the timing and conviction of the BoE with regards to interest rates. Meanwhile, US housing data will be monitored.

  • BoE Voting Pattern
  • US Existing Home Sales

Thursday 23rd July 2015

UK retail sales will be closely watched today as consumer spending makes up a large part of the nation’s GDP. In addition, UK mortgage approvals are also due to hit the wires. Crossing the pond the US weekly jobless claims is on the agenda.

  • UK Retail Sales
  • US Weekly Jobless Claims

Friday 24th July 2015

Purchasing Managers (PMI) data comes into focus today from several regions in both manufacturing and service sectors.  French, German and Eurozone PMI are due from both the service and manufacturing sectors. Meanwhile the US manufacturing PMI is set for release along with the new home sales.

  • European PMI Services and Manufacturing
  • US PMI Manufacturing
  • US New Home Sales