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A Look At Events In The Week Ahead: All About Greece Part 2

Tyler Durden's picture




 

From Goldman Sachs

Week in Review

Markets remained glued to events in Greece last week starting with the Eurogroup finance minster meeting at the beginning of the week, the vote of confidence in the Greek Government, which they won, to the Eurogroup summit at the end of the week, which approved the Greek Medium-Term Fiscal Strategy. The latter will be subject to a parliamentary vote in the coming week. Despite all the too-ing and fro-ing over Greece, the Euro really hasn’t done that much. It remained essentially range-bound, as did most other currencies, including the Dollar. Cyclical assets broadly matched this pattern. The US Wavefront Growth basket has climbed off its lows, but bond yields generally declined last week.

Week Ahead

Greece will remain the main focus of attention. As it stands at the moment, the Greek Parliament will begin to debate the medium-term fiscal plan and the implementation laws on Monday. Voting on the legislation will occur on Wednesday for the Medium-Term Fiscal Strategy and Thursday for the implementation law. After the government won a vote of confidence, the assumption is that the required legislation will pass through parliament. However, reports that several PASOK members will potentially vote against the measures will likely add to the uncertainty ahead of the outcome of the parliamentary vote.

On the assumption that Greece passes the required legislation, on July 3, the Eurogroup will authorise the disbursement of the fifth tranche of the current package, and on July 11, will unveil the new funding package for Greece. Again on the assumption that Greece passes the required legislation, the macro data will become front and center on Friday, given it is the first day of the month we will get the release of PMIs globally. We already have a flavour of business sentiment given the downside surprises delivered by the Empire survey, Philly Fed, and the HSBC China Flash PMI, as well as the Euroland Flash PMIs. As usual, we will release the final reading of the GLI for June after the US ISM, which is expected to soften further.

Monday 27 June

US Core PCE (May): We expect a rise of 0.24% mom against consensus expectations of a 0.2% rise, which is equivalent to the last reading.

Tuesday 28 June

US Consumer Confidence (Jun): We expect a slight decline to 59.0 fro 60.8; consensus expects a reading of 61.0.
Also of interest: Korea BoP (May), Japan retail trade (May), Philippines trade balance (Apr), Third reading of UK Q1 GDP, German CPI.

Wednesday 29 June

Greek Fiscal Consolidation Vote I: Parliamentary votes on a €28 billion, five-year austerity package of tax hikes and spending cuts agreed with the European Union and the International Monetary Fund. The session starts at 10 a.m. Athens time (0700 GMT) and will conclude sometime in the afternoon with a vote.

Japan IP (May): We forecast the May Industrial Production Index to rise 5.0% mom, after rising 1.6% mom in April. The May reading is likely to affirm that production is on track for a solid recovery. Consensus expects a rise of 5.5% mom.

Also of interest: Swiss KOF indicator, Euroland business and consumer confidence,

Thursday 30 June

India BoP Q4 FY 2011: We expect the current account deficit to come in at 2.2% of GDP in 4QFY11, similar to the 2.1% of GDP in the previous quarter, mainly due to higher-than-expected merchandise exports growth.
Taiwan Central Bank Meeting: We expect the central bank to hike its policy rate by 12.5bp in the upcoming policy meeting, as does the consensus. We forecast another 12.5bp rate hike in the September meeting, and one 25bp hike for the December meeting, and another 62.5bp of total hikes in 2012, taking the policy rate to 2.875% by end-2012 (from the current level of 1.75%).

Greek Fiscal Consolidation Vote II: Parliament votes on a separate implementation law spelling out the fiscal measures in more detail -- potentially more difficult as the laws will cover individual privatisations, tax steps, and spending cuts.
Euroland CPI Flash (Jun): We expect the headline reading to remain steady at 2.7% in June. We continue to forecast a peak in inflation at just under 3.0% later this year.

US Chicago PMI (Jun): We expect a decline to 55.0 from 56.6, consensus expects a reading of 54.0.
Also of interest: Korean IP (May), Korean Business confidence (Jul), US Claims.

Friday 1 July

Global Business Surveys:

China PMI: We expect the official PMI to fall by around 1 percentage point in June, from 52.0 in May.
US ISM (Jun): We expect a decline to 52.0 from 53.5, indeed the Philly Fed index suggests some risk of a sub-50 reading. Consensus expects a reading of 51.7.
Japan Tankan (Q2): Consensus expects the large manufacturers index to fall to -7 after a reading of 6 previously and the large non-manufacturers to fall to -4 from 3.
Indonesia CPI (Jun): The last print was 5.98%yoy on headline and 4.64%yoy on core.
Thailand CPI (Jun): We expect inflationary pressures to continue to build in Thailand. We expect June headline CPI inflation to come in at 4.3%yoy, above the consensus and previous reading of 4.2%yoy.
Korean CPI: Consensus expects a rise to 4.3% from 4.1% previously.
Japan CPI (May/June): National CPI for May is expected to rise by 0.2%yoy after 0.3% previously. Tokyo CPI for June is expected to decline by 0.1% equivalent to the previous print.
Korean Trade data (Jun): Consensus expects exports to rise by 17.6%yoy down from 23.5%yoy previously.
Also of interest: Japan Vehicle sales (Jun).

Sunday July 3

Eurozone Finance Ministers to hold an extraordinary meeting.

 

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Sun, 06/26/2011 - 21:46 | 1404378 The Aviator
The Aviator's picture

Were greece to default, paper currencies around the world would head to zero immediately.  Got Silver?

Sun, 06/26/2011 - 23:49 | 1404635 Ahmeexnal
Ahmeexnal's picture

Massive riots in Argentina right now.  Sheeple have finally decided to revolt against TPTB? Ummm..no. Riots are due to River Plate descending to second division:

 

http://www.clarin.com/deportes/destrozos-comercios-Avenida-Libertador-TN...

http://www.youtube.com/watch?v=6WwWodGQIC8

 

Men are infinitely malleable. Or perhaps you’ve returned to your old idea that the proletarians will arise. Put it out of your mind. They are helpless animals.

 

 

 

Mon, 06/27/2011 - 07:13 | 1404924 JuicedGamma
JuicedGamma's picture

Soccer fans?

Mon, 06/27/2011 - 02:16 | 1404778 Hedge Jobs
Hedge Jobs's picture

im suprised you only have 3 junks that is one of the stupidest things ive heard. a greek default would lead to a rise in the USD. A rising USD also means silver goes down like it has been lately.....until QE3 is announced that is. No hurry to buy silver yet. Now that QE is (temporarily) ending expect the broader deflationary collapse to start playing out again where the dollar rises and everything goes down, precious metals included.

Sun, 06/26/2011 - 21:50 | 1404394 ONEPurpose
ONEPurpose's picture

Default looks likely too. Greeks are buying up precious metals like madmen. They know what's up, the only thing that keeps silver's price down is American ignorance. If we rushed to all our local dealers and cleaned them out, silver would be more expensive than gold in a friggin' week. 

 

That's not a bad idea....

 

Silver Viral Project. 

 

http://silver-viral-project.1054564.n5.nabble.com/

Sun, 06/26/2011 - 22:00 | 1404428 The Aviator
The Aviator's picture

Yup...probably like twice as much as gold. Theres nothing left! Already joined the Silver Viral Project...and been trying to promote it as much as possible too. Need to get the Hedger's to participate...lots of sheeple to herd (or educate perferably)  into silver!

Sun, 06/26/2011 - 22:07 | 1404435 HungrySeagull
HungrySeagull's picture

Greece Greece Greece.

Such drama.

One big fat Default.

 

Millions default on obligations every day, and we don't see shit. The write off is just a number. Only issue is having something large enough to record those large figures.

Mon, 06/27/2011 - 05:57 | 1404870 tonyw
tonyw's picture

such a drama, just look at how much Greece has taken. Read this article about  The Big Fat Greek Gravy Train: A special investigation into the EU-funded culture of greed, tax evasion and scandalous waste

http://www.dailymail.co.uk/news/article-2007949/The-Big-Fat-Greek-Gravy-Train-A-special-investigation-EU-funded-culture-greed-tax-evasion-scandalous-waste.html

Why should Germans work until 67 to fund Greeks to retire at 50?

 

Sun, 06/26/2011 - 22:57 | 1404550 putbuyer
putbuyer's picture

I thought the first vote was on Tuesday?

Sun, 06/26/2011 - 22:56 | 1404559 Jovil
Jovil's picture

Join the Silver Viral project and get ahead of the game.

http://lonerangersilver.wordpress.com/silver-viral-project/

Sun, 06/26/2011 - 23:00 | 1404561 A Lunatic
A Lunatic's picture

Vote for me and there will be a block of marble in every yard.

Sun, 06/26/2011 - 23:10 | 1404582 lineskis
lineskis's picture

Tyler, not a word about Mario Draghi, ex Goldman Sachs Europe, replacing Jean Claude Trichet at the ECB?

http://translate.google.com/translate?u=http%3A%2F%2Fnews.google.fr%2Fne...

Sun, 06/26/2011 - 23:14 | 1404595 lilika
lilika's picture

Hellas, DEFAULT!! Buy Gold and Silver, go back to Drahmae, and get out of the nazi gulag!

Sun, 06/26/2011 - 23:32 | 1404629 Temporalist
Temporalist's picture

Soros is a bear.

 

Euro Exit Plan is ‘Probably Inevitable’: Soros

http://www.bloomberg.com/news/2011-06-27/exit-plan-for-eu-probably-inevi...

Sun, 06/26/2011 - 23:50 | 1404637 sasebo
sasebo's picture

When are the Greeks, Irish, etc. citizens going to take the privilege to print free paper money away from the greedy, delusional, asshole billionaire bankers? When there's no groceries at the local grocery store or gas at the local gas station. Free paper money doesn't grow groceries or produce anything. Farmers & workers do.   

When will the SHTF? Keep your eye on your local grocery store & gas station. Don't waste your time listening to the stupid asshole politicians. They don't know shit from Shinola. If they did we wouldn't be here & the greedy stupid asshole bankers wouldn't be the ones printing paper money & using it like poker chips. The government would be printing paper money & lending it out to entrepreneurs to create jobs & produce something people can consume. You can't consume CDO's, CDS's, etc. 

Sun, 06/26/2011 - 23:45 | 1404648 gwar5
gwar5's picture

The Greeks should at least copy the Chinese. They should make it government policy to encourage and tell their people to protect themselves with gold and silver outside the banks. Save the shitty Euros for taxes and tolls.

The Chinese were very wise to tell the little people to acquire PMs to protect themselves from western banker currency attacks. They know WTF is going on!

Mon, 06/27/2011 - 01:35 | 1404764 hungarianboy
hungarianboy's picture

While everybody is focusing on greek, in the background the following happens.

The " White Knight (China ) " is assuring France and Germany that it will fund the greek bailout. Then Merkel is holding a secret call with papadontknowshit and assures them about China is helping.

Papadontknowshit in the background conficing the pairlament and they vote for the package. Problem solved.

Mon, 06/27/2011 - 05:57 | 1404869 bakken
bakken's picture

Metaphorically,...yes.  That could be very likely the case.  If China gets left holding  the bag on a BIG default in Europe, will they get MAD?  Maybe they have to keep dropping good money after bad to try to save their initial investment.  After all, they want very strongly for the Euro to stay alive.

If the US trade flops over, they will bleed big time and their $2trillion balance will be gone in a couple of years.  Might as well play big shot now.

Mon, 06/27/2011 - 06:49 | 1404907 Tabarnaque
Tabarnaque's picture

The Bangsters were culprits in hiding the real Greek debt level just before they entered the Euro zone. GS and JPM actively participated in hiding part of the Greek debt through the use of derivatives. Then the Bangsters kept on lending more money for years at an extreme low cost to an already broke and highly corrupt country. These were years of irresponsible investment practice done by the banks. Therefore the Banks should get a haircut on the Greek debt. Not the tax payers (either German, French or Greek). I hope the Greeks default on their debt and let the TBTF Bangsters take a hit on the money that they first created out of thin air anyway. The hell with selling national Greek assets to feed the greedy bangsters. They created money out of thin air, lent it for years to a broke country and now they want nothing less than possessing Greek’s national assets on one side and get the German tax payers on the hook for the rest of whatever will be left unpaid.

 

We need a serious revolution here. What is going on in Greece is just a prelude of what will happen in the USA. These crocks have no limit on their greed and desire to possess as much of the world’s resources as they can. The whole monetary system we live in is the biggest scam that was ever created by mankind. 

Mon, 06/27/2011 - 06:56 | 1404911 Tabarnaque
Tabarnaque's picture

The Bangsters were culprits in hiding the real Greek debt level just before they entered the Euro zone. GS and JPM actively participated in hiding part of the Greek debt through the use of derivatives. Then the Bangsters kept on lending more money for years at an extreme low cost to an already broke and highly corrupt country. These were years of irresponsible investment practice done by the banks. Therefore the Banks should get a haircut on the Greek debt. Not the tax payers (either German, French or Greek). I hope the Greeks default on their debt and let the TBTF Bangsters take a hit on the money that they first created out of thin air anyway. The hell with selling national Greek assets to feed the greedy bangsters. They created money out of thin air, lent it for years to a broke country and now they want nothing less than possessing Greek’s national assets on one side and get the German tax payers on the hook for the rest of whatever will be left unpaid.

 

We need a serious revolution here. What is going on in Greece is just a prelude of what will happen in the USA. These crocks have no limit on their greed and desire to possess as much of the world’s resources as they can. The whole monetary system we live in is the biggest scam that was ever created by mankind. 

Mon, 06/27/2011 - 10:39 | 1405328 trx
trx's picture

Just some additional info(graphics):

The Week Ahead: Hold On To Your Hats!
Do NOT follow this link or you will be banned from the site!