Key Events And Catalysts In The Week Ahead

Tyler Durden's picture

Goldman's Thomas Stolper, who still has a 1.50 target (or maybe higher, we forget) on the EURUSD, summarizes the key catalysts in the upcoming week.

Week Ahead

China activity data: Following the June CPI print, which saw inflation rise to 6.4% yoy, in line with our above-consensus forecast, we will be looking for above-consensus activity readings for Q2 GDP and June industrial production.

Eurogroup meeting and bank stress tests: This will be an important policy week for Europe. On Friday, the IMF approved its disbursement to Greece under the old EU/IMF program of EUR110 bn agreed in 2010. Discussions at the Eurogroup meeting will center on the financing of a new program, which is supposed to close the financing gap for Greece for 2012 and 2013. The role of private sector involvement remains a key issue. The week also brings a bond auction for Italy on Thursday, for an estimated EUR7 bn. The week ends with the publication of the EU-wide bank stress tests on Friday. Summary results will be published at 6 pm CEST, with bank-by-bank results following thereafter.

Bernanke testimony: In his semiannual monetary policy testimony, Fed Chairman Bernanke is likely to repeat the basic message from his recent press conference—namely that labor market performance has been disappointing but that inflation remains too high to combat the weakness with additional monetary easing.

Monday 11th

Eurogroup meeting: see above

Tuesday 12th

Indonesia central bank meeting: We expect Bank Indonesia to pause again, in line with consensus, following its decision to remain on hold in the last four policy meetings since March. We expect the central bank to hike the policy rate by another 50 bp for the remainder of this year.

Singapore GDP (Q2): Our forecast is for a moderation in 2Q2011 GDP growth to 2.8% yoy from 8.3% yoy in 1Q2011, as indicated by the slowing in the monthly activity indicators so far. This is above consensus, which is at 1.0% yoy. We expect a subsequent recovery to above-trend levels of around 5.5% for 2H2011.

India industrial production (May): We expect the May Industrial Production Index to grow at 8.5% yoy, higher than 6.3% yoy in April, mainly due to the lower base of last year and slightly better performance of the infrastructure index. Consensus expects a reading of 8.7% yoy.

Japan central bank meeting: We think the BOJ is likely to raise its economic assessment at the July 11-12 MPM. We expect policy to remain unchanged, with no additional easing. However, we expect external demand and nationwide electricity supply concerns to be cited as risks.

UK CPI (Jun): We expect CPI inflation to edge slightly lower from +4.5% to +4.4%yoy. That said, on our forecast path (which assumes the hike in gas and electricity bills, announced by an additional utility company this week, will become the industry standard), inflation will not peak until the autumn - at a level close to 5%. Consensus expects inflation to remain unchanged at 4.5% yoy.

United States trade balance (May): We expect the trade deficit to widen to -$48.0 bn, above consensus of -$44.1 bn and up from -$43.7 bn in April.
United States FOMC minutes

Wednesday 13th

China GDP (Q2): We expect 2Q 2011 GDP growth to fall to 9.4% yoy, down from 9.7% yoy in 1Q2011. This is slightly above consensus (9.3% yoy).
China industrial production (Jun): We believe June industrial production growth could rise to 13.6% yoy, up from 13.3% yoy in May. This is above consensus, which expects a decline to 13.1% yoy in June.

Thailand central bank meeting: We expect a 25 bp hike at the upcoming meeting, in line with consensus. The various populist policies proposed by the incoming government will likely add to further inflationary pressures and keep the Bank of Thailand on its rate hike cycle.

Bernanke delivers Semi-Annual Monetary Policy Report: In his semiannual monetary policy testimony, Fed Chairman Bernanke is likely to repeat the basic message from his recent press conference—namely that labor market performance has been disappointing but that inflation remains too high to combat the weakness with additional monetary easing (July 13, 14).

Thursday 14th

South Korea central bank meeting: We continue to expect a 25 bp hike in August followed by hawkish remarks in the July Monetary Policy Committee meeting, although we would not rule out a surprise hike at the upcoming meeting. Consensus expects the central bank to remain on hold.
India WPI (Jun): We expect June WPI inflation to come in at 9.7% yoy, higher than 9.1% yoy in May, mainly due to a rise in prices of food articles, especially poultry products. This is in line with consensus.

United States retail sales (Jun): Monthly retail sales are likely to have fallen in June, partly for disappointing reasons (lower vehicle sales) and partly for good ones (lower gasoline prices that reduced fuel expenditures). We expect headline retail sales to fall 0.5% mom, below consensus which expects a flat reading.

Euro zone CPI (Jun): We expect inflation to read 2.7% yoy, unchanged from the May reading and in line with consensus.
Italy 5-year bond auction: see above

Friday 15th

United States CPI (Jun): Consumer prices probably edged down in June, but the core index is likely to log another increase of around 0.2%. We expect headline to fall -0.3% mom, below consensus which sees a fall of -0.1% mom.

United States Empire manufacturing survey (Jul): Consensus expects a reading of 5.00, up from -7.79 in June.

United States University of Michigan consumer confidence (Jul): Consensus expects a rise in this preliminary reading to 72.5 from 71.5.

EU bank stress tests: The 2011 test will feature a harsher methodology, including core – not headline – Tier 1 (CT1) capital forming the base, the hurdle rate being tougher at 5% CT1, and the disclosure of capital composition allowing effective comparisons

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mongo's picture

Donkey Kong must be tired by now...

Juice Box's picture

My key events next week:

  1. Politicians will talk saying such things as "blah blah, blah".
  2. The people will be screaming such things as "we need help".
  3. The meat puppets on TV will tell us they saw it coming.
  4. The Fed will insist they have it all under control.
Pretty much what happened last week and the week before, the week before.....

Yen Cross's picture

 Now rewind those comments and you have the week ahead.... NPR style.

mynhair's picture

...but that inflation remains too high to combat the weakness with additional monetary easing

What inflation?  Thought there was no inflation.

mynhair's picture

Gold down 2.11?  That makes sense - not.

HungrySeagull's picture

It's had a march from 1490 to 1540 and a little profit taking is taking place.

Same with silver.

disabledvet's picture

Have you ever seen a country go bankrupt before? As they say in the business "prior gains are no guarantee of future returns." History only takes us so far...

Yen Cross's picture

  Good post DaV... " never count your chickens before they hatch" comes to mind... +1

Cassandra Syndrome's picture

Futures opened down somewhat.

Monedas's picture

Key events: NASA Space Shuttle and Larry King and Oprah announce retirements again ! NASA wonders why they just didn't leave the space shuttles parked in Earth orbit and return  with Cosmonauts ! They are bigger than the Space Station....those Boxcars to Nowhere ! They could use them for storing frozen pizzas  and chicken nuggets for future rendevouz in space ! Monedas 2011 Comedy Jihad World Tour

GoldmanSux's picture

Cramer replaces Joe Kernan and Becky Quick. You lose mkt share in access to Buffett, you are OUT!

disabledvet's picture

Excellent summary. You're crushing Seeking Alpha.

XRAYD's picture

Why does anyone listen to Ben B, who said:

"We don’t have a precise read on why this slower pace of growth is persisting."