FXstreet.com (Barcelona) - The better than expected outcome at the European Summit has put core government bond markets somewhat on the defensive. However, According to the FX Strategy team at Westpac International Bank, “The half life of risk-on periods related to such events has in the past proved disappointingly brief.” they write. In the meantime, global growth and inflation indicators continue to soften across Asia and Europe. “A further sell off in Treasuries and the rest of the G4 markets therefore offers an opportunity to add to long positions.” the team notes.

It will be particularly interesting to see how long the positive mood continues after Friday’s meteoric post-EU summit rally. The scope of the economic calendar this week is quite large, which will dominate sentiment ahead of the commencement of US 2Q corporate reporting next week (beginning with Alcoa on July 9th).