The drop in the eurozone PMI supports the idea that the latest Eropean Central Bank's (ECB's) "hawkish cut" was about growth risks, BBH FX strategists note.

Monetary policy to drive the market this week

“The drop in the eurozone PMI supports our view that the ECB's 'hawkish cut' this month was all about growth risks. The SNB cut rates for a second time last week, while the BOE delivered a dovish hold that sets up an August cut.” 

“Meanwhile, Fed officials continue to counsel patience, with most stressing that the bank needs to see more progress on inflation before contemplating a rate cut. The market continues to see November as the most likely meeting for a cut, though there are nearly 75% odds of a cut in September. As always, it will come down to the data.” 

“Waller, Goolsbee, and Daly speak today. Even consummate dove Goolsbee has been staying on message and so the cautious messaging is likely to continue this week.”