- After yesterday's record-breaking session on Wall Street and (except China) a rising session on stock exchanges in Asia, European index contracts are trading slightly higher
- In the absence of any significant macro releases, investors' attention today is focused on the minutes of the ECB's June meeting (12:30 PM BST)
- Trading on Wall Street closed due to the 4th July Independence Day holiday in the US; volatility in U.S. futures is very limited today
Yesterday's session brought new highs for Wall Street benchmarks, reinforcing the belief in the 'positive' seasonality of U.S. indices, for which the first two weeks of July are statistically the best period of the entire year. In the absence of the US session, attention will focus today on indices from the Old Continent, which, like the Eurodollar, may react to the minutes of the June ECB meeting. Investors will be looking for more 'dovish' signals from the ECB, especially given that June was also the month of the first Eurozone rate cut.
- Given recent data from Europe, including today's German industrial orders, which unexpectedly fell by 1.6% m/m (0.5% growth was expected), it seems that reactions to any 'dovish' insertions from the ECB minutes could be further amplified, as investors lose confidence in the sustainability of the recently expected rebound in the Eurozone economies.
- Yesterday's 'cautiously weak' ISM data from the US services sector may suggest that Europe is facing a similar scenario, and a cooling in services, currently the ECB's main concern, could increase the scale and accelerate the pace of rate cuts. Yesterday's Fed minutes did not receive a significant reaction from the markets; bankers stressed that they are waiting for data to justify a rate cut and are watching for a slow cooling in the US economy.
Economic calendar
7 AM BST Germany. Industrial orders (m/m): -1.6% vs. 0.5% forecast and -0.2% previously
7:30 AM BST Switzerland. CPI inflation for June (y/y): 1.3% vs. 1.4% forecast and 1.4% previously (0% m/m vs. 0.1% forecast and 0.3% previously)
8:30 AM BST 9:30, Eurozone. Construction PMI index readings
9:30 AM BST, UK. Construction PMI index reading: 54 forecast vs. 54.7 previously
12:30 PM BST Eurozone. ECB minutes (June)
3:15 PM BST Eurozone. Cipollone speech from the ECB
