The euro regained more ground against the dollar on Monday

Good Morning,

- The euro regained more ground against the dollar on Monday, having rebounded from a five-month low, but trading was calm thanks to a holiday in Japan and amid concerns that geopolitical tensions could flare up at any time. The downing of a Malaysian airliner in eastern Ukraine last week and fighting in Gaza still dominated the markets, but developments over the weekend did not bring any fresh worries.

- Asian shares: Japan's Nikkei close, Hong Kong's Hang Seng -0.09% (07:11 GMT), Korea's Kospi -0.05%, Australia's ASX 200 0.17% and China's Shanghai -0.22%.

- The dollar index was unchanged at 80.51, having retreated from a one-month peak last Friday when the euro bounced off a five-month low of $1.3491.

- In June 2014 the German index of producer prices for industrial products fell by 0.7% compared with the corresponding month of the preceding year. While prices of consumer non-durable goods increased by 0.9% compared with June 2013 prices of intermediate goods decreased by 1.1% and energy by 2.4%. In May 2014 the annual rate of change all over had been –0.8%.

- Credit Suisse on EUR/USD: We favour an eventual break below here and 1.3477 to complete a large bear "wedge". EUR/USD is back weighing on key support at 1.3513/03 – the June low, uptrend from July 2012 and "neckline" support. We allow for this to hold further, but favour an eventual break below here and then the 1.3477 low for the year to confirm the complete the expected large bear "wedge". This should then trigger further weakness to 1.3399 initially, ahead of 1.3248/28 – the 38.2% retracement of the entire 2012/2014 uptrend. Resistance shows at 1.3541 initially, then 1.3570/87, above which can see strength back to the downtrend at 1.3611.

- A basket of emerging-market currencies fell against the dollar last week as Russia and Ukraine blamed each other for the downing of a Malaysian Airline and Israel’s military began a Gaza ground incursion. Also the dollar rose last week as Fed Chair Janet Yellen told lawmakers borrowing costs may rise sooner than markets expect, should the labor market continue to improve faster than anticipated and St. Louis Fed President James Bullard said on July 17 the central bank may have to raise rates more quickly than planned as unemployment falls and inflation quickens.

- Britain will pass another milestone in its economic recovery this week, with official figures showing it has clawed back all the output lost since the 2008 financial crisis. The economy probably maintained momentum rather than accelerated between April and June, according to economists' forecasts of GDP data from the Office for National Statistics on Friday. They expect growth of 0.8%, unchanged from the first three months of the year, according to a Reuters poll. That will see the economy return to its pre-crisis peak in overall terms.

- The New Zealand dollar recovered some of their recent losses, popping above 87 U.S. cents in early trade from Friday's low of $0.8649. The kiwi had suffered its biggest weekly fall in about six months. New Zealand's central bank is widely expected to lift its cash rate to a 5-1/2 year high of 3.5 percent on Thursday, but some analysts suspect the central bank will signal a pause to the tightening cycle.

- Japan's government will cap new bond issuance for next fiscal year's budget at 41.3 trillion yen ($407.62 billion), which is the same amount of new debt sold for the current fiscal year's budget, the Nikkei reported on Saturday. The debt cap will help the government meet its fiscal discipline target, but it will have to cut spending as budget requests for next fiscal year are expected to rise to a record high above 100 trillion yen, the Nikkei reported.

- Japanese financial markets closed on Monday for a public holiday. There is no key economic data out of Asia.