Focus today will turn to the Eurogroup meeting where Greece is in focus as the economic data calendar is relatively thin. Sunday evening the Greek parliament approved the 'first review bill' including both the contingent mechanism and privatisation fund. According to media reports the Eurogroup is likely to approve the first review today, which would also allow Greece to negotiate the terms of its obligations.
A couple of prominent ECB members are scheduled to speak during the week and today markets will look for comments from chief economist Peter Praet. Praet is usually very dovish but at the end of April he said 'deploying negative rates again in the future would require a distinct worsening of the inflation outlook' and we expect Praet to stick to the ECB's current patient view where it waits to see the impact of the measures announced in March.
We expect the German ZEW investor expectations to weaken slightly in May as financial sentiment is less optimistic than in April. Looking beyond the UK referendum (our base case is that the UK votes to stay in the EU) we expect uncertainty will fade considerably. This - together with very low costs of borrowing, stronger foreign demand and considerable pent-up demand within investments - should result in a re-acceleration in investment growth.
The central banks in Turkey and Hungary will announce rate decisions. Markets generally expect unchanged Turkish rates and a Hungarian cut.
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