Euro gains

The Euro made gains on Friday and starts off at over $1.1350 to the dollar and 89p to sterling this morning. Bond yields ground down further last week, on foot of quite dovish sentiment from the ECB and Fed, and German 10-year yields are around -0.3% now while US 10-years are close to 2%

Oil prices moved higher in past few days and a barrel of Brent crude rose to $65 from $61 at the start of last week. The recent attacks on oil tankers and the downing of a US drone by Iran (followed by on again/off again retaliatory strikes by the US) have significantly heightened tensions between the two countries and this could well lead to further volatility in oil prices

The Euro area flash composite PMI ticked up in June to 52.1 from 51.8 in May. The slight improvement was down to an increase in the services PMI which rose to 53.4 from 52.9 while manufacturing continues to struggle and was more or less unchanged at 47.8, signalling a continuing contraction in the sector

Central banks did not disappoint last week with the ECB, through Draghi, and the Fed signalling monetary policy is set to ease while the BoE was more cautious but still said that downside risks had increased. Central bankers will be to the fore once again in the upcoming days with Fed Chair Powell set to speak on the economic outlook and monetary policy on Tuesday and BoE Governor Carney testifying to Treasury Committee on Wednesday

Date due this week includes German IFO index (Monday), US durable goods orders (Wednesday) and PCE inflation (Friday)