Progress on Greece, ECB dovish, Ifo to offer comfort

The big news this week was that Greece is finally emerging from a period of eight years under bailout programmes. But our judgement remains that the risks of a future Greek default and/or euro-zone exit are significant. Meanwhile, comments at the ECB’s annual Forum on Central Banking in Sintra, Portugal, did nothing to change our view that a gradual series of interest rate hikes will begin next September. And the rise in June’s Composite PMI, released this week, supported our assessment that the euro-zone economy will continue to perform well.