Iran latest: Hegseth promises that U.S. military will reopen Strait of Hormuz
A fairly light global calendar. In the euro area we expect German industrial production to have decreased slightly. German Ifo has weakened a bit and also the factory orders released on Friday showed a decrease. German industrial production has shown solid readings during Q1 and we expect the near-term weakness to be a soft patch and growth to pick up during H2.
The sentix investor confidence is the first July print that is being released. This indicator tends to have little market impact as the direction in general is more correlated with market sentiment than economic activity. We expect a minor decrease as euro-area data releases have been surprising on the downside lately. This is also reflected in the surprise index that has dropped to around a one-year low.
At tonight's Eurogroup meeting the euro-area Finance Ministers are set to approve a EUR1bn tranche for Greece.
As the US was closed on Friday due to Independence Day, market attention in the US session is likely to remain on the implications of the strong non-farm payrolls. We expect trend job growth to rise gradually to 250k-300k in H2, as growth picks up further steam. As core inflation is also bottoming out and housing is expected to recover, this will likely lead to less dovish talk from Fed during the autumn and more risk/term premium in the US money market curve, see also Strategy: Difficult for Fed to remain very dovish, 4 July.
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