Market Movers
The Greek parliament is going to vote tonight on the reform legislation necessary for the third bailout from the EU. The vote is scheduled for around 10pm. Prime minister Alexis Tsipras is expected to get the vote through with support from the opposition, while parts of his own Syriza party will vote against it.
Fed Chairman Janet Yellen is due for the semi-annual testimony to Congress. We expect her to repeat the message from last week that she expects lift-off this year. We believe the market is pricing too few rate hikes over the next 1-2 years, see Fed hike drawing closer, EUR-US rate spread to widen . On the US data front industrial production and PPI are up but will likely be overshadowed by Yellen's testimony.
In the UK the labour market report is set to be interesting after Bank of England governor Mark Carney said the time for a rate increase is 'moving closer'. MPC member David Miles also stated that 'the time to start normalisation is soon - that is not something to shrink from'. Both cited the strength of the labour market with rising wage growth as an important factor. Wage growth has accelerated over the past year and is expected to rise to 3.0% y/y in May from 2.7% y/y in April (ex bonuses).
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