Focus will continue to be on the international geopolitical situation, albeit tension at least for now appears to be easing. In Ukraine the risk of an imminent Russian intervention appears to have eased after Russia yesterday announced that major military exercises along the Ukrainian border have ended. However, so far there are no signs that the Ukrainian government will stop its offensive in eastern Ukraine and it remains a major uncertainty how Russia will respond to the outlook for a possible Ukrainian victory. In Gaza the three-day temporary cease-fire is holding and negotiations about a permanent ceasefire restarted yesterday in Cairo. Finally, in Iraq the US bombings appear to have halted ISIS's advance.
We have a relatively light data calendar today. In Europe the most interesting release is the German ZEW business sentiment indicator for August. We expect both current 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 more companies reporting that they intend to increase prices and have difficulties filling vacancies.
In the Scandi markets focus will be on the Swedish inflation.
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