"The focus remains on Spain and Italy. In exchange for additional time to reach its deficit targets, the Spanish government agreed to new austerity measures, which were announced earlier this week", they explain. "Spain's 10-year yield has nonetheless retraced nearly 50% of the move since June 28/29 Summit and the negative feedback of a deeper recession will likely feed into the next round of cuts".
"Spain will issue bills on Tuesday and bonds on Thursday, which will be important watch to gauge the market's demand for Spanish debt. Lastly, ZEW surveys out July 17 are likely to point to continued euro zone weakness", they add.
According to BBH key levels for EUR/USD on the upside are seen near $1.2340, $1.2460, says BBH while supports come near $1.2150, $1.1880.