ING: The EUR - FJElite

As our team have been discussing this week, we think it is too early for the ECB to abandon its tightening rhetoric - even though a second hike in September could be a policy mistake. The ECB script remains that last month’s rate hike was not an insurance move, and it sounds like the ECB wants to talk tough to ride out this inflation hump and ensure that second-round effects do not emerge. That suggests market pricing of one ECB rate hike by early next year can stay in money market curves.

Eurozone data today will be the flash release of June CPI data, where headline and core are both expected to soften slightly.

EUR/USD could make a break back to the 1.1325 lows on Warsh today.