Economy
Janet Yellen will present testimony regarding the Federal Reserve's monetary policy this morning. Fed watchers are looking for clues to the timing of future interest rate hikes after data in the second-quarter displayed the economy gaining momentum. Investors are still predicting that policymakers are in no rush to raise rates. The expected news will probably keep the market rally going today, but any hints of hawkishness will likely trigger a negative reaction.

Mario Draghi is warning that euro zone recovery is at risk with a strong euro and highlighted that large-scale purchases of public and private debt do fall within the ECB's mandate to keep inflation low and stable. EU growth has been faced with a difficult time due to an appreciated exchange rate threatening price stability. Draghi has also urged EU member states to implement tougher structural reforms to boost economic development.

Israel's security cabinet has approved of a truce proposed by Egypt which calls for a de-escalation after 6:00 GMT today and a full truce within 12 hours thereafter. Hamas responded that they had not been consulted by Egypt and vowed attacks would "increase in ferocity and intensity". Delegations from Israel and Palestinian factions are to hold talks in Cairo within 48 hours.

More energy firms are seeking to export condensate after a landmark ruling last month tweaked the definition of the ultralight oil, saying it was not considered crude once it was distilled. Enterprise Product Partners (NYSE:EPD) and Pioneer Natural Resources (NYSE:PXD) have already received permission from the Commerce Department and the U.S. energy industry is now demanding more permits.

Stocks
Microsoft is preparing for another round of lay offs as it looks to scale back and streamline its Nokia Oyj handset unit, Bloomberg reports. After acquiring Nokia’s mobile device business the company added around 30k jobs. The restructuring may end up being the largest in Microsoft (NASDAQ:MSFT) history, exceeding the 5,800 job cuts in 2009. Reductions will take place in marketing, engineering and other divisions that overlap with the Nokia business.

America Movil is increasing its ownership in Telekom Austria (OTCPK:TKAGY) from 27% to 50.8%. The $1B buyout marks America Movil's (NYSE:AMX) first successful move into the European market after it failed to acquire Dutch carrier KPN last year. The company is also looking to expand its operating base outside of Mexico after new legislation passed last week requiring the telecom giant to cut its Mexican market share to below 50%.

Sprint Chairman Masayoshi Son is facing higher lending fees for financing the purchase of T-Mobile (NYSE:TMUS), as lenders are expecting a lengthy approval process. The Sprint (NYSE:S) takeover review can take at least a year to evaluate, and may not even be approved by regulators who insist they want to preserve four competitors in the U.S. wireless market. The DOJ previously sued AT&T (NYSE:T) in 2011 to block its effort to acquire T-Mobile.

Citigroup will get a tax break on at least part of its $7B settlement with the U.S. government over its mortgage securities. CFO John Gerspach announced that the $500M in payments to state attorneys general and the FDIC would be deductible, along with any costs Citi (NYSE:C) actually incurs in relation to consumer relief - which could be less than the $2.5B called for in the settlement.

Trading in Barclays' U.S. dark pool has fallen 37%. The drop follows the New York Attorney General's lawsuit last month which accused the bank of deceiving clients about how the pool operated. During the final week of June, 197M shares traded on the dark pool, down from 312M the previous week. Although Barclays (NYSE:BCS) is still investigating the allegations, most major brokers have already shut down their connections to the pool.

Volkswagen is investing $900M in its manufacturing plant in Tennessee to start production for a new mid-sized SUV. U.S. company sales dropped 7% in 2013 and fell another 13% in the first half of 2014 despite growing overall market sales. Volkswagen (OTCQX:VLKAY) is now trying to retrieve its U.S. share. CEO Martin Winterkorn admits to dedicating too much time to other markets but is now looking to adjust things.

Staples says it will give up its pilot program to offer postal services at its stores, shifting instead to the established Post Office Approved Shipper program already available in thousands of retail outlets across the U.S. The American Postal Workers Union had said the Staples (NASDAQ:SPLS) program would undermine the role of post offices and shift postal worker jobs to lower paid and less experienced SPLS retail staff.

CEO of GE Aviation David Joyce expects the firm to attain its target of $30B of orders at the Farnborough Airshow by the end of the day. Engine maker GE (NYSE:GE) has seen a record amount of purchases between its operations GE Aviation and CFM International, a joint venture between itself and Safran (OTC:SAFRF). The company is also looking to finalize an engine deal with Qatar Airways over Boeing 777X planes.

Today's economic calendar:

7:45 ICSC Retail Store Sales
8:30 Retail Sales
8:30 Import/Export Prices
8:30 Empire State Mfg Survey
8:55 Redbook Chain Store Sales
10:00 Business Inventories
10:00 Yellen delivers semi-annual monetary policy testimony

Notable earnings before today's open: CBSH, CMA, GS, JBHT, JNJ, JPM, WWW

Notable earnings after today's close: ADTN, AIR, CSX, CTAS, IBKR, INTC, YHOO