With Greek elections and Spanish banking rescues addressed in the European summit. Analysts are now starting to forecast the probability of a ECB benchmark rate cut on Thursday. European data was weaker which makes the case for a rate cut. Adding to that even the policital winds have changed. Once favouring austerity only measures to solve the crisis, the case has now been made that financial stimulus should be an alternative to restart the Euporean economy.
With the US Fourth of July holiday coming up on Wednesday the market will be waiting for the announcements from the European Central BAnk as well as the Bank of England which is set to make a rate announcement first. The market is already starting to price a rate cut, with saw the EUR lose ground versus the USD before theÂ fourthÂ of July holiday.