Today, the two-day European Council meeting starts. Several topics will be in focus and migration, Brexit, security and Eurozone reforms are on the agenda (European Council Agenda Highlights), according to analysts at Danske Bank.
Key Quotes
“Migration will be one of the hottest topics, especially following the pressure on Merkel from her CSU coalition partner to find an EU-wide solution to migration problems. We will also closely follow what stance the new Italian government will take on the topics. We are likely to see a very split EU, where only France’s Macron seems to be a strong advocate for closer EU cooperation in terms of economics, security and migration.”
“Trade will also be discussed in light of recent global and growing trade tensions. The European Council is expected to underline the importance of the multilateral rules-based system, call for improvements to the functioning of the World Trade Organisation and emphasise the EU’s positive trade agenda.”
“In terms of Brexit, the summit has become less important as the clashes between the EU and UK are likely to be postponed to the October EU summit. However, Brexit remains a key driver for the pound and thus very sensitive to Brexit-related comments from the Summit.”
“The German flash inflation print for June is due to be released, which together with similar releases in Italy and Spain may be an important gauge for the eurozone inflation release tomorrow. The market is expecting inflation to fall back modestly in Germany from 2.2% in May to 2.1% in June, due primarily to base effects.”
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