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According to Danske Bank analysts, trade war headlines and geopolitical developments remain the key market drivers,  although the news flow might calm down compared to the last days after the G7 summit.

Key Quotes

“In Italy, look out for the ongoing coalition talks, as a deal seems to be moving closer. This morning news media report that PD is still undecided on Conte. Talks will resume at 11:00 CEST.”

Final German Q2 GDP data  will reveal how hard net exports have been hit by the escalating trade war and Brexit uncertainty. We will also look out for signs of weakness in domestic demand, especially weaning investment growth.”

“ECB Vice President  Luis de Guindos  and BOE policy committee member  Silvana Tenreyro  speak at a conference in Manchester.”

The Hungarian central bank will publish its rate announcements at 14:00 CEST.  We expect the policy rate to remain at 0.90%,  as inflation has fallen closer to the 3% target from its overshooting levels. Furthermore, the current global monetary easing bias will keep the MNB from hiking.”

In Sweden, household lending and trade balance figures are due for release.  The trade balance is still likely to show a surplus, possibly lower than last month’s SEK2.9bn.”