Last week was another volatile one for financial markets, although most major indices ended the week on an upbeat note. Following on from last week the Greek debt situation continued to concern investors, with the likelihood of the Greeks remaining in the Eurozone looking slim at the beginning of the week. From Wednesday sentiment improved, with the Greek Prime Minister, Alexis Tsipras, appearing to yield to the majority of the proposals made by the country’s creditors.

Following a nightlong meeting last night (Sunday), it appears that there is now agreement between Greece and its creditors. This has already been taken positively by investors with a bailout at least deferring concerns over the solvency of Greece for potentially another 3 years.

There was also more positive news from Asia this week with the stock market crash in China appearing to come under control. The Chinese authorities have been escalating the measures it will take to restore faith in their stock markets which have worked, at least in the short term.

In the US, the Federal Reserve meeting last week was split on whether to increase interest rates, with some members citing ongoing economic risks, subdued employment and low inflation. However, it is expected that the first rate rise will be before the end of this year.
The UK saw a narrowing of its trade deficit to £393m for the month of May, the lowest since June 2013 and significantly beating forecasts. However, this was driven by a fall in imports rather than a boost in exports.
Looking forward, on Tuesday inflation data for Germany and the UK will be released, with US inflation data expected on Friday.
The US will also be releasing updates on producer prices, jobless claims and housing starts. All of these will be watched closely by fixed income traders as an indication for the time and pace of US rate rises.