Greece agrees to most cuts, Eurozone heads for crunch time

Leaders in Greece have agreed the majority of cuts imposed as conditions of their bailout package, as the ‘trioka’ of lenders (EU, ECB and IMF) are staying on in the country to conclude talks. They are due to visit again in September before a final decision on extra funds is made.

September will be a crunch month for the Eurozone, with a German court due to to make a ruling which could neuter the Eurozone rescue funds, Dutch elections which may lead to an anti-bailout Netherlands government, and Italy and Spain potentially requiring bailouts too. With many European policymakers taking their summer breaks in August, we are unlikely to see any major policy changes until September, by which time Spain could be in serious trouble, so the weak Euro is likely to remain for the coming weeks.

This week as we head to the end of July, we have an Italian bond auction at 10am, at the same time as some Eurozone consumer confidence figures. There is no major data due out elsewhere, so the Euro is again likely to dominate headlines and exchange rate movements.