A heads up to the EU Leader's Summit in Brussels coming up, markets will be keenly focused on the EU Recovery Fund discussions.

Via MUFG, in brief:

  • downside risks for the euro continue to ease
  • continuation of ECB support for the economic recovery and for the euro-zone debt markets is important for improving confidence in euro-zone assets and the euro
  • next key test for the euro will be next week's EU Leader's Summit on 17th and 18th July in Brussels
  • discussions will focus on the EU Recovery Fund

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ICYMI, the EU Recovery Fund

  • financing totalling up to EUR750 bn, split between grants of EUR500 billion and loans of EUR250 billion
  • Netherlands, Austria Denmark and Sweden want to reduce the amount of funds distributed as grants