Greece likely to meet its ECB payment

ECB President Mario Draghi has noted that he expects Greece to make its payment on Monday following his move to raise the Emergency Lending Agreement (ELA) amount to Greece's central bank. Funds for making the ECB payment would be aided by an expected €7 billion bridge loan to Greece. 

The Irish Prime Minister spilled the beans this past Thursday when he noted that euro-area finance ministers have agreed on the bridge loan and it will be formally announced after successful votes on the Greek aid package in European parliaments.

"European markets face three principal risks over the coming week. One is whether Greece makes its €3.5 billion payment to the ECB on Monday. Two is further colour on the rate hike debate at the Bank of England when meeting minutes will be released on Wednesday. Three is the release of the latest crop of purchasing manager indices on Friday", says Scotia Bank.

Minutes to the July 9th meeting of the Bank of England's Monetary Policy Committee will arrive on Wednesday and will be useful to further showcase the range of views on timing rate hikes. Governor Carney recently noted that over the next three years, he thinks the BoE's policy rate will rise to half the historic average. 

Carney also noted recently that "....households should begin to manage their finances with the assumption that there should be an upward adjustment in interest rates." MPC member David Miles recently commented that "The time to start normalization is soon; that is not something to shrink from."

By contrast, BoE Chief Economist Andy Haldane thinks policy rates are appropriate, and "I have no bias on either the size or direction of future interest rate moves." The UK also releases retail sales for June; they have been climbing for the past two months.