Expectations of a Fed rate hike are back in focus

•      Expectations of a Fed rate hike are back in focus

•      The market shift its attention back on Fed rate hike expectations after Greek debt crisis talks finally reached an agreement.

•      With Grexit seemingly averted, investors will focus on the semi-annual testimony by Fed Chair Yellen and whether she will give any hints regarding the timing of a rate hike.

•      However, the Greek drama has still to enter its final act as the Greek PM must pass a series of unpopular legislations in order to rebuild trust and start negotiations on a new bailout program.

•      This could keep EUR under selling pressure, while Monday’s relief rally in stock markets could continue today but any signs of inability to pass the bills are likely to pause any advances.

•      Overnight we had a relatively quiet session with AUD the only exception

•      AUD/USD strengthened after Australia’s NAB business conditions and business confidence indices both increased in June from the previous month.

•      Today:

•      Germany: ZEW survey for July. Expectations are for another decline in the indices, which could add to the evidence that the German economy is losing momentum.

•      UK: CPI for June. The focus will probably be on the core figure and on any signs of positive upside momentum in prices. 

•      Sweden: CPI for June is expected to fall into deflation again. This could be SEK-negative.

•      US: Retail sales for June. A positive surprise in June’s figure is needed to keep confidence up and USD supported. NFIB small business optimism for June is also coming out.

•      Speakers: BoE Governor Mark Carney testimony by The House of Commons Treasury Committee.