Fed returns to center stage as Greece eyes bailout

As Greece faces having to push major reforms through parliament before Wednesday to prove to its creditors it can follow through with their terms, focus can return to the timing of a Federal Reserve interest rate rise according to asset managers.

After overnight talks, euro zone leaders have finally reached an agreement to provide Greece with a new bailout loan, which includes placing some Greek assets into a 50 billion euro privatization fund in order to unlock aid from the European Union's financial assistance program, the European Stability Mechanism (ESM)

Read MoreGreece latest: Overnight talks result in aid-for-reform deal

Federal Reserve Chair Janet Yellen speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, June 17, 2015.
Andrew Harrer | Bloomberg | Getty Images
Federal Reserve Chair Janet Yellen speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, June 17, 2015.

While the deal is still contingent on the Greek parliament giving it the green light, a rejection of the bailout terms at this stage would almost certainly result in a Greek exit from the euro zone and so investors are already beginning to turn their attention back to the Fed.

"If you look at what Janet Yellen was saying on Friday, she said that Greece was one thing that was unresolved in the global economy. She explicity talked about it as something that could delay or accelerate the pace of Fed fund hikes," said Jim Leaviss, head of retail fixed income at M&G, the U.K.'s largest asset manager which over manages over £167.7 billion ($261 billion) in assets.

"Now that we do have a deal and you could argue that Greece is no longer unresolved and we could get this memorandum of understanding passed later this week then this is no longer an overhang on the global economy - and it probably gives Yellen and the Fed the go ahead to start hiking this year," Leaviss told CNBC.

In terms of positioning, this means investors should look to be short duration, or reduce bond exposure to interest rate risk, own floating rate notes or bonds with a variable interest rate and be long the U.S. dollar, Leaviss said.

"We reduced our long (German) Bund position last week, so we sold a lot of that down and we have increased our peripherals a bit. I think the ECB will be very conscious of not letting the contagion to spread. If a Greek deal gets done this week, then the Fed are going to move," he said.

Read More#Thisisacoup: Greek deal attacked for tough terms

Since it first fell into dire economic straits in 2010, Greece has already been bailed out to the tune of 240 billion euros ($267 billion), and last week asked for an additional 53.5 billion euros. Ahead of Monday's deal, euro zone sources told CNBC they estimate that Greece will need a further 82 billion-86 billion euros.

Meanwhile, Fed Chair Janet Yellen said in a speech on Friday in Cleveland that despite recent weak economic data and a call from the International Monetary Fund to delay a rise until 2016 had dampened expectations of a 2015 increase, it would still be appropriate to start "normalizing" monetary policy this year.

International investment strategist at U.K. wealth manager deVere Group,Tom Elliott said his advice to clients remained to "stay on the fence and don't try to be clever. It is the safest place for a long-term investor to be."

"If you want to play then I do quite like the 2017 Greek government bond. But that is not what we are saying to our clients. I like that bond because I think Greece will stay in the euro zone," he told CNBC.

But Elliott said the timing of the Fed's rate hike, which is now almost certainly going to take place this year following her comments on Friday, has long outweighed Greece concerns.

"In terms of equity, I do like Europe, but these are small bets I am taking, and I like Japan as well. Don't forget Europe has seemed to have suffered quite a correction these last few months and that seems not to have hit the headlines.But ultimately, I think the U.S. raising rates too fast too soon for the U.S. economy to handle trumps the risk coming from Greece," he said.

European equities are also still preferred by chief investment officer at UBS Wealth management, Mark Haefele, as are overweight positions in U.S. and euro zone high-yield bonds in fixed income markets, following the Fed's confirmation of a "pro-growth policy stance" last week.

Read MoreGreece and euro zone 'unanimously' reach deal

"Fed chair Yellen indicated that any tightening would be "gradual" and that "monetary policy will need to be highly supportive of economic activity for quite some time." It still seems likely that the Fed will hike rates at least once this year," he said in an investment update to investors.

In terms of Greece Haefele said even in the worst case scenario of a Greek exit from the euro zone, he remain convinced that the European Central Bank stands ready to take action to restore calm.

"The events of the past few days have underlined our positive view on risky assets. We believe that policy decisions in Europe, China and the U.S. will prove supportive, and we retain our overweight positions in euro zone equities, and U.S. and euro zone high yield bonds," he added.