Daily Economic Outlook: 16 July, 2015

The ECB meeting will dominate proceedings today. While policy rates are anticipated to remain unchanged, there is expected to be a review of the Emergency Liquidity Assistance (ELA) provided to Greek banks, which has been frozen at €89bn. President Draghi's press conference at 13:30 BST will be closely watched for a potentially more cautious tone on the euro area growth outlook. He may hint that asset purchases under the QE programme could be extended beyond the expected end date of September 2016 or even stepped up. Lloyds Bank expects, Mr Draghi is also likely to be asked about recent Greek developments, potentially including the ECB's role in the provision of short-term bridge financing, debt sustainability and implementation risks following the reform measures agreed on Monday.

Fed Chair Yellen likely to provide a second day of testimony to Congress, this time to the Senate. She is expected to repeat her comments made yesterday to the House. In particular, notwithstanding risks from developments in China and Greece, she sees further improvement in the labour market and a rebound in the economy which would make a rise in interest rates this year 'appropriate'.

Economic data may take a back seat in light of key events noted above. The final reading of euro area June CPI are expected to confirm the preliminary flash estimate, namely that headline inflation fell back marginally to 0.2%y/y from 0.3%y/y in May, notes Lloyds Bank. US Philadelphia Fed and NAHB housing market surveys are also due. Domestically, BoE Governor Carney's speech in Lincoln will take place this evening, scheduled for 19:00 BST. On Tuesday, at the Treasury Committee, the Governor said that an interest rate rise "is moving closer".