Next Week's Key Events: Political Developments In Greece, FOMC and Industrial Surveys In Euroland

Tyler Durden's picture

Goldman Sachs summarizes the key events in what promises to be a most exciting week:

First and foremost, last week was marked by substantial political volatility in Greece. After intense political workings over the week that almost caused government instability, a new cabinet was appointed on Friday (June 17) and the Prime Minister will seek a vote of confidence in the parliament over the next few days and no later than Tuesday, June 21 (as local press reports). Should the vote be successful, it would pave the way for the approval of the new austerity measures over the following few days and remove hurdles towards the disbursement of the next IMF/EU tranche of the existing program. The Prime Minister also continues to invite the main parties to overcome their divisions and work on a national consensus.

The Eurogroup Finance Ministers are meeting Sunday night and Monday (June 19-20), while a G7 conference call on Greece is scheduled for Sunday night as well. Germany has already softened its position regarding private sector participation in a second Greek support package. More headlines with respect to the Greece rescue can be expected in the coming days. The upcoming week will also be marked by the EU summit of Heads of State towards the end of the week.

Beyond Greece the two key events are the FOMC meeting and press conference, which will be interesting, given the Fed currently faces a challenging deterioration in the growth-inflation trade-off.

Finally, cyclical data disappointed last week, further adding evidence of a "soft patch" with the Philly Fed and the U of Michigan consumer confidence reports printing below consensus. Next week, we will find out whether European survey data and US durable goods orders confirm this trend of cyclical deceleration or whether they point to cyclical divergence across the Atlantic.

Overall, we maintain a reasonably constructive stance across our FX recommendations, with long exposure in Asia (PHP, MYR, CNY), and expect further broad Dollar weakness. This also includes EUR/$ where the currently emerging compromise on additional Greek funding and reforms should warrant a gradual decline in the fiscal risk premium. Finally, we remain concerned about the current account position in Turkey and will watch the CBRT meeting on Thursday (June 23). [Translation: Goldman is now desperate to get its clients to short the USD...]

Monday 20th

Hungary Monetary Policy Meeting: We expect no change from 6.00%, in line with consensus.

Second day of the Eurogroup/Ecofin Meeting on Greece

Taiwan Export Orders (May): Latest manufacturing data out of the US had been softer than expected. This is consistent with the slower momentum seen in Taiwan’s export data recently. We would also keep an eye on the supply-chain disruptions in Japan.

Tuesday 21st

US Existing Home Sales (May): We expect no change vs. consensus of -5.0% mom after -0.8% in April.

Greece Confidence Vote: A positive outcome would pave the way towards the voting of the medium-term fiscal austerity package. [ZH: and a negative vote means the bankers lose]

RBA Minutes: After a significant decline in interest rate expectations by the market it is interesting to watch the RBA’s stance closely.
Also Interesting: South Africa Current Account.

Wednesday 22nd

US FOMC Meeting: We expect no change, in line with consensus. The Federal Open Market Committee is stuck between a rock (slow growth) and a hard place (higher inflation). We expect Chairman Bernanke to indicate at the FOMC press conference that there is little prospect of either monetary tightening or monetary easing anytime soon.

Norway Monetary Policy Meeting: We expect no change from 2.25%, in line with consensus, after the 25 bp hike at the last meeting.

BOE Minutes: It will be interesting to see if there has been any change in the voting pattern following the softer patch in the data.

Malaysia CPI (May): We continue to expect rising inflationary pressures, underpinned by a robust domestic demand recovery and against the backdrop of elevated global commodity prices. Consensus is looking for 3.3% yoy.

Also Interesting: Euroland consumer confidence, Poland/South Africa May CPI.

Thursday 23rd

Euroland Flash PMI: Consensus expects both the flash Manufacturing as well as the flash Services PMIs to soften to 53.8 and 55.5 after 54.6 and 56 in May, respectively.

Turkey Monetary Policy Meeting: We expect no change from 6.25%, in line with consensus, and will scrutinize the CBRT’s assessment of current account risks.

Czech Republic Monetary Policy Meeting: We expect no change from 0.75%, in line with consensus.

US Initial Jobless Claims: Consensus expects 410k after 414k the week before.

EU Summit: European Union Heads of State meet for a 2-day summit in Brussels.

Also interesting: Singapore May CPI, ECB Trichet Speech.

Friday 24th

German IFO/Retail Sales: We expect 113 vs. consensus of 113.5 after 114.2. Also May retail sales will be released, for which consensus expects 1.0% mom after 0.3% in April.

US Durable Goods Orders (May): We expect 1.0% mom vs. consensus of 1.6% mom after -3.6% in April. Durable goods orders probably bounced back in May, as aircraft orders rebounded slightly.

US Q1 GDP (Final): Consensus expects 1.9% qoq annualized vs. 1.8% in the second estimate.

EU Summit: Final day of the 2-day meeting

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Ahmeexnal's picture

No mention of the multiple caravans that will start in several cities in Spain. Ostrich sindrome by the MSM.

bankrupt JPM buy silver's picture

"We expect Chairman Bernanke to indicate at the FOMC press conference that there is little prospect of either monetary tightening or monetary easing anytime soon."

Ummmm, so does that mean I will cash out my NFLX PUTS around $99 soon?

Re-Discovery's picture

I know Goldman is the vile squid and gets all the inside info and all that crap.  But judging from all the different noise that has been coming from them lately, I don't think anyone there has any idea how -- or more importantly when -- this plays out.


Of course, they will still manage to make out better than any of us.

JustACitizen's picture

Taking recommendations from GS (if you are a client and if you are not - why aren't you?) reminds me of this entire exchange (filched from a website that filched it from a movie script):


All right. Where is the poison? The battle of wits has begun. It ends when you decide and we both drink, and find out who is right... and who is dead.
Vizzini: But it's so simple. All I have to do is divine from what I know of you: are you the sort of man who would put the poison into his own goblet or his enemy's? Now, a clever man would put the poison into his own goblet, because he would know that only a great fool would reach for what he was given. I am not a great fool, so I can clearly not choose the wine in front of you. But you must have known I was not a great fool, you would have counted on it, so I can clearly not choose the wine in front of me.
Man in Black: You've made your decision then?
Vizzini: Not remotely. Because iocane comes from Australia, as everyone knows, and Australia is entirely peopled with criminals, and criminals are used to having people not trust them, as you are not trusted by me, so I can clearly not choose the wine in front of you.
Man in Black: Truly, you have a dizzying intellect.
Vizzini: Wait till I get going! Now, where was I?
Man in Black: Australia.
Vizzini: Yes, Australia. And you must have suspected I would have known the powder's origin, so I can clearly not choose the wine in front of me.
Man in Black: You're just stalling now.
Vizzini: You'd like to think that, wouldn't you? You've beaten my giant, which means you're exceptionally strong, so you could've put the poison in your own goblet, trusting on your strength to save you, so I can clearly not choose the wine in front of you. But, you've also bested my Spaniard, which means you must have studied, and in studying you must have learned that man is mortal, so you would have put the poison as far from yourself as possible, so I can clearly not choose the wine in front of me.
Man in Black: You're trying to trick me into giving away something. It won't work.
Man in Black: Then make your choice.
Vizzini: I will, and I choose - What in the world can that be?
Man in Black: [Vizzini gestures up and away from the table. Roberts looks. Vizzini swaps the goblets]
Man in Black: What? Where? I don't see anything.
Vizzini: Well, I- I could have sworn I saw something. No matter. First, let's drink. Me from my glass, and you from yours.
Man in Black, Vizzini: [Vizzini and the Man in Black drink]
Man in Black: You guessed wrong.
Vizzini: You only think I guessed wrong! That's what's so funny! I switched glasses when your back was turned! Ha ha! You fool! You fell victim to one of the classic blunders - The most famous of which is "never get involved in a land war in Asia" - but only slightly less well-known is this: "Never go against a Sicilian when death is on the line"! Ha ha ha ha ha ha ha! Ha ha ha ha ha ha ha! Ha ha ha...

chump666's picture

Ah Goldman, Taleb's black swan about to swoop.  

lucylary's picture

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Yen Cross's picture

  Picking up the pieces?

The Onion Of Twickenham's picture

Eurozone tells Greeks to pull their fecking fingers out and do as they're told or they don't get the money to cover next month's bills.

Greekonomics - coming soon to a bankrupt country near you. Get in line, Ireland, Portugal, Spain, Belgium, Italy...