Market themes of the Day: UK manufacturing and the first monthly GDP headline

What you need to know before markets open
In Europe

• The ECB Governing Council member Ewald Nowotny said that ECB can afford to have Eurozone inflation above 2% for a month or so because of rising oil prices and that negative interest rates cannot be a permanent feature of monetary policy. Longer we live with negative interest rates, the more we have to be careful to avoid asset bubbles from looser lending, Nowotny said.
• ECB’s President Mario Draghi was upbeat on the economy in the European Parliament saying the underlying economic fundamentals remain solid while downside risks to the outlook mainly relate to the threat of increased protectionism. Draghi said ECB’s confidence in the inflation path is also rising.
• German ZEW index of investors’ sentiment is expected to fall further to -18.6 in July after reaching the cyclical peak of 20.4 in January.

In the UK

• The UK government has found an immediate replacement for the resigning ministers with Dominic Raab replacing the outgoing Brexit minister David Davis.
• The UK foreign secretary Boris Johnson resigned on Monday.
• The UK Prime Minister Theresa May tells MPs Brexit White Paper will be published "next week". Not this Thursday, as had been planned.
• The UK manufacturing output is set to rise 0.7% m/m in May after falling -1.4% in April while the industrial production is expected to rise 0.5% m/m in May after falling -0.8% in the previous month.
• The UK Office for the National Statistics is expected to deliver the first estimates of the monthly GDP in May that is seen rising 0.3% m/m. For details read my Preview here. 

In China

• China’s consumer prices rose 1.9% y/y while producer’s prices accelerated to 4.7% y/y in June.