EU foreign ministers are meeting today to decide on further sanctions againstRussia following the MH17 crash. In particular UK’s Cameron is pushing foradditional sanctions. However, the ministers that are meeting today cannot approve‘phase three’ sanctions, which include targeting entire sectors of the Russianeconomy. Such a move needs backing from the heads of state and government.Cameron and other hardliners are pushing for the foreign ministers to lay thegroundwork.
In the US focus is on inflation data and existing home sales. Core CPI has beenedging upwards recently. We are expecting an increase of 0.2% m/m and 2.0% y/y, inline with consensus. Fed’s preferred inflation gauge, the core PCE, is also edgingupwards although the level is still somewhat lower currently at 1.5% y/y. The lowerlevel stems mainly from a lower weight on housing. With the US labour marketstrengthening, inflation data are set to have a bigger market interest and impact duringH2.
Earnings season is peaking this week and Coca-Cola, Apple and Microsoft willreport today. Both sales and earnings have in general been coming in a tad better thanexpected by analysts. This is supporting US equities that are hovering around an alltimehigh, despite the geopolitical tensions.
Read the full report: FX Daily