Greece not over yet...

•     Optimism over Greece means monetary policy divergence returns as driver of FX

–    Market now discounting successful resolution of Greek drama – Greek stocks up 6.1% yesterday, bank stocks up 10.4%

–    Focus now back on Fed and likelihood of first rate hike in September

–    Better-than-expected US new home sales, continued recovery in core durable goods orders suggests US economy still expanding

–    Fed Gov. Powell says he sees 50-50 chance of hike in Sep, maybe another in Dec

•     Greece not over yet, though

–    Some SYRIZA members object to harsh new measures that include further cuts to pensions, rise in taxes for people & companies

–    Will vote on measures over the weekend. Greek parliamentary approval is necessary

•     API stats show large drawdown in inventories; oil rallies

–    Boosts commodity currencies, with AUD, NZD, CAD and RUB gaining

–    Subhead

•     Today:

–    Eurozone: German Ifo survey expected to be soft, could further weaken EUR; EU finance ministers hold emergency meeting in evening to discuss Greece

–    US: 3^rd estimate of Q1 GDP expected to be revised up = USD-positive