Eurozone: Let’s stay together

Massive news from the Eurozone: Greek Finance Minister Euclid Tsakalotos issued a statement this morning (11 August), saying that although “two or three small issues” are still to be resolved, a deal has been reached between Greece and its creditors.
 
This means Greece will be refuelled in time to meet the debt repayment deadline of 20 August, as well as achieve another bailout package of €86 billion from the International Monetary Fund and the European Central Bank. The palpable relief lent further support to the euro, as EUR/USD trades steadily just under the 1.10 mark.
 
Elsewhere on the economic calendar for the Eurozone, there’s German wholesale price data, Italian inflation data and Eurozone economic sentiment numbers out this morning.

US: Rate changes to come
 
Last week’s non-farm payroll numbers from the US fell just shy of the expected reading, although the US economy remains close to its employment targets. In an interview with Bloomberg, US central banker Stanley Fisher revealed that a rate rise could come as early as September, given that inflation continues to remain low and needs to get closer to the 2% target before the US can raise interest rates.
 
However, other officials confirmed that once it starts the process will be very gradual. In terms of economic data from the US, markets will look closely at Redbook numbers as well as weekly crude and gasoline inventories after a mild rebound in commodity prices.
 
Sterling manages to claw back against the Greenback
 
Sterling has managed to recover after taking a significant hit last week when the Monetary Policy Committee voted 1:8 in favour of a rate rise. Bank of England Governor Mark Carney’s dovish stance didn’t help the pound, but Sterling rebounded overnight against the US dollar; GBP/USD currently trades just under the 1.56 level.
 
With record stimulus going on in the Eurozone and a lack of worldwide inflation, the Bank of England remains on track to be the second major central bank to raise interest rates after the US Federal Reserve. On a fairly quiet day on the economic calendar for the pound, investors will look to the Conference Board’s Index data for a clearer view of the future direction of the economy.