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European Session – Greek Parliament passes bailout vote, Eurozone CPI and GDP have little impact in quiet market

The market’s focus was on the Eurozone today as GDP and inflation data were out as well as results of the Greek Parliamentary vote on the third bailout package. As was expected, the Parliament voted to approve the 85 billion euro financial aid package but this has caused a widening rift within Greek Prime Minister Alexis Tsipras’ Syriza Party. As a result, Tsipras has called a confidence vote for later in August or September, after Greece makes a loan payment to the ECB on August 20. Snap elections are expected soon after as there is growing speculation that Tsipras will not survive the confidence vote.

GDP data for the second quarter showed the Eurozone economy grew by less-than-expected, by 0.3% quarter-on-quarter versus 0.4% q/q anticipated. Meanwhile, German GDP was below expectations at 0.4% q/q.

Other data showed the final reading for Eurozone headline CPI came in at 0.2% in July on a year-on-year basis while core inflation rose slightly to 1.0% y/y. The core reading excludes food, energy, alcohol, and tobacco. For month-on-month CPI, the headline inflation number dropped 0.6% from the previous figure of 0.0%.

The euro traded between a range of 1.1123 and 1.1170 in a quiet European session.

The pound traded between 1.5587 and 1.5625. The only UK data point was on construction output, at 0.9% in June versus 2.2% expected.

The dollar declined against the yen in European session trading to fall to 124.13, after having reached a high of 124.52 in Asia.

Looking ahead to the US session, data will be released on industrial production, the Producer Price Index (PPI) and the preliminary University of Michigan consumer sentiment index, all out of the US.

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