Focus will continue to be on the international geopolitical situation, albeit tensionat least for now appears to be easing. In Ukraine the risk of an imminent Russianintervention appears to have eased after Russia yesterday announced that majormilitary exercises along the Ukrainian border have ended. However, so far there areno signs that the Ukrainian government will stop its offensive in eastern Ukraine andit remains a major uncertainty how Russia will respond to the outlook for a possibleUkrainian victory. In Gaza the three-day temporary cease-fire is holding andnegotiations about a permanent ceasefire restarted yesterday in Cairo. Finally, in Iraqthe US bombings appear to have halted ISIS’s advance.
We have a relatively light data calendar today. In Europe the most interesting releaseis the German ZEW business sentiment indicator for August. We expect bothcurrent conditions and the expectations component to have declined further,underscoring that the German export engine has lost some steam recently.
In the US the Small Business Confidence for July also deserves some attention.Although it declined slightly in June, it remains strong with more and morecompanies reporting that they intend to increase prices and have difficulties fillingvacancies.
In the Scandi markets focus will be on the Swedish inflation.
Read the full report: FX Daily