A fairly light global calendar. In the euro area we expect German industrialproduction to have decreased slightly. German Ifo has weakened a bit and also thefactory orders released on Friday showed a decrease. German industrial productionhas shown solid readings during Q1 and we expect the near-term weakness to be asoft patch and growth to pick up during H2.
The sentix investor confidence is the first July print that is being released. Thisindicator tends to have little market impact as the direction in general is morecorrelated with market sentiment than economic activity. We expect a minor decreaseas euro-area data releases have been surprising on the downside lately. This is alsoreflected 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 aEUR1bn tranche for Greece. As the US was closed on Friday due to Independence Day, market attention in theUS session is likely to remain on the implications of the strong non-farmpayrolls. We expect trend job growth to rise gradually to 250k-300k in H2, as growthpicks up further steam. As core inflation is also bottoming out and housing isexpected to recover, this will likely lead to less dovish talk from Fed during theautumn and more risk/term premium in the US money market curve.
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