Key Events And Market Issues In The Coming Week

Tyler Durden's picture

In the week ahead, we get the usual middle-of-the-month batch of early business surveys, including the New York Empire, Philly Fed and Eurozone Flash PMIs. The second key focus will be a number of important monetary policy meetings, including the FOMC, as well as the Swiss, Norwegian Turkish and Indian policy decisions. The latter two are particularly interesting in the light of the recent EM weakness. The main event this weak will be the FOMC meeting after the recent market focus on the timing of tapering of the QE3 program. Swings in bond markets related to the FOMC meeting could be the primary source of FX volatility this week.

Goldman expects the FOMC statement to show only modest changes, mostly focused on acknowledging the lower inflation numbers. Moreover, the committee is likely to downgrade its 2013 growth and inflation numbers moderately. While Chairman Bernanke is likely to reiterate in the post-statement press conference that the QE tapering decision is data dependent, he is largely expected to dissuade markets from frontloading too much of the entire monetary tightening process—not just the end of QE but also the normalization of the funds rate—as soon as the committee takes the first step in that direction.

Finally, still linked to monetary policy, BOJ Governor Kuroda will give a speech, which FX markets will scrutinize for any hint of additional easing to alleviate the unwinding pressures on $/JPY.

Monday, 17 June

  • US Empire MI Index (Jun): previous -1.4, consensus 0
  • US Homebuilders Survey (Jun): consensus 45, last 44
  • Eurozone Trade balance (Apr): previous EUR 18.7bn
  • UK Rightmove house prices: previous 2.1% yoy
  • Russia GDP: consensus +1.6% yoy
  • India MPC
  • Turkey unemployment (Mar): previous +10.5%
  • Also interesting: Poland Current Account (Apr), Czech Republic Current Account (Apr), Singapore Exports, Canada International Securities Transactions, Italy Trade Balance, Canada home sales

Tuesday, 18 June

  • US CPI: GS -0.1%, consensus +0.2%, last -0.4% (+0.1% ex-food and energy)
  • US Housing Starts (May): GS 15%, consensus 11.4%, last -16.5%
  • Japan IP (Apr): previous -2.3%yoy
  • UK CPI (May): previous +2.0% yoy
  • Turkey MPC: consensus unchanged
  • Also interesting: Russia IP, South Africa nonfarm payrolls

Wednesday, 19 June

  • US FOMC meeting rate decision: It would be risky to deliver a hawkish monetary policy message at a time when growth remains sluggish, inflation continues to trend down, and market inflation expectations are dropping sharply. Goldman does not expect the committee to deviate much from the existing message and keep all options open, and believes that Fed officials will, on the margin, try to calm markets.  Moreover, the committee is likely to downgrade its 2013 growth and inflation numbers moderately. While Chairman Bernanke is likely to reiterate in the post-statement press conference that the QE tapering decision is data dependent, Goldman expects him to dissuade markets from frontloading too much of the entire monetary tightening process—not just the end of QE but also the normalization of the funds rate—as soon as the committee takes the first step in that direction.
  • Japan Trade Balance (May)
  • South Africa CPI (May): consensus +5.9%yoy coinciding with previous yoy data point
  • South Africa GDP (Q1 revised): previous +1.9%
  • South Africa Current Account (Q1): consensus -6.9% of GDP sa while previous -6.5% of GDP
  • UK MPC minutes
  • Euro Area construction stats (Apr): -1.7%mom and -7.9%yoy
  • Also interesting: Malaysia CPI

Thursday, 20 June

  • US initial jobless claims: consensus 340K while previous was 334K
  • US leading indicators (May): previous +0.6%
  • Euro area flash consumer confidence: previous -21.9
  • Euro area flash PMIs
  • Switzerland MPC
  • Switzerland Trade Balance (May): previous CHF 1.73bn
  • Norway MPC (June): previous 1.50%
  • Also interesting: Brazil unemployment, Colombia GDP

Friday, 21 June

  • BOJ Governor Kuroda speech
  • Brazil FDI inflows: forecast US $4bn yoy while previous was -US $5.7bn yoy
  • Canada CPI (May): previous +0.4%yoy
  • US Phily Fed survey (Jun): GS -3, consensus -2.0, last -5.2. Recent weakness in the manufacturing data, including the decline in the May ISM manufacturing index and slow growth in manufacturing industrial production, are likely to persist in early June.
  • US existing home sales (May): GS 1%, consensus 0.6%, last 0.6%
  • Also interesting: Russia Gross International Reserves, Colombia IP


The above in Tabular format from Socgen

And the Top Issues for the week ahead alsofrom SocGen


Recent economic data suggest little cause for the Fed to draw any significant new conclusions on the real economy at the 18/19 June FOMC. Several Fed officials (including Bernanke and Dudley) have already signalled that tapering could begin around September/October if the economy continues to resist fiscal constraint. Our hope for this FOMC meeting is not for any change in policy and nor as some observers argue for a downplaying of tapering risk, but rather some insight on the tapering criteria and how it will be conducted. The FOMC statement and economic projections will not answer these questions; Chairman Bernanke’s press conference would be the possible venue. On the data front, housing data dominate the week and we look for firm readings, which will help build confidence on sustainable recovery.

MARKET ISSUES: The taper debate remains centre stage with ramifications for financial markets well beyond US borders. Greater transparency would be helpful, but we do not expect Bernanke to play down his comments on the possibility of taper at the next few meetings.


The Eurogroup/ECOFIN meet on 20-21 June ahead of the 27-28 June European Council. The main topics on the Council agenda include (1) the conclusion of the European Semester, (2) an evaluation of efforts to boost employment and growth, and (3) progress on banking union. The Commission is, moreover, due to present the new solidarity measure, which allows countries signing up to a strict diet of structural reforms to win  some offsetting economic support. Latvia’s euro application will also be discussed.

MARKET ISSUES: Too-little-too-late remains the common fault line of many of the European growth initiatives. Moreover, for all the talk of less  austerity, the targets set out in the national stability programs, due to be validated at the June Council, suggest that fiscal consolidation remains the priority. PMI data this week should see some further improvement but are still very consistent with our scenario of a very gradual improvement only.


Hope is that the G8 will deliver a trade and tax deal, but at best, we expect a declaration of good intentions. Friday saw some good news as a compromise was reached to exclude cultural industries thus allowing the Council to approve the launch of trade and investment negotiations with the US (on Monday).

MARKET ISSUES: Consensus expectations are low and we would be surprised to see much tangible action. A successful conclusion with the US-EU trade talks could according to EU Commission estimates boost the region’s GDP by 0.27-0.48%. These talks, however, are likely to run many months and successful conclusion is far from guaranteed.


Wednesday will see the release of the 5-6June MPC meeting minutes. On the same day, Mervyn King is due to speak at Mansion House.

MARKET ISSUES: Focus now is on Mark Carney’s arrival – hopes have been spun high, and the risk is disappointment

* * *
Source: Goldman and SocGen

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RSloane's picture

The key market issue in the coming week[s] will be how loud the drums beat for the invasion of Syria.

LawsofPhysics's picture

Yes, and that will depend on treasury rates.  When "debt is money" sovereign debt must expand or the whole ponzi blows up.  Eventually, yes the world will go back to a real war (proxy wars never ended) and sort this all out.  There simply are far too many paper promises relative to the real assets and resources available.

Same as it ever was.

RSloane's picture

I can smell 'money' growing as we speak. Don't we feel richer already.

LawsofPhysics's picture

Let the rape of the taxpayers commence, profits and revenue are way down at the military industrial complex...

same as it ever was...

Dr. Engali's picture

Good morning Sloan. I say we quit pretending, skip over Syria and go after the real target Iran. After all it's not the congress critters kids going into the meat grinder. It's too bad the American people can't identify the real enemy that lives a lot closer to home.

RSloane's picture

Good morning Doc! American miitary may now, in Syria, have a chance to shoot at Iranian and Russian troops. Oh how we have longed for this day. Iran has always been our "jewel in the crown". Instead of crippling them with hyperinflation from which they will not recover for decades, we can actually shoot their citizens. If that isn't good for treasury bonds I don't know what is. American people can't identify the real enemy because the MSM hasn't told them yet. This is time for flag waving, or so I've been told.

stocktivity's picture

It's all Bullshit!!!!  Rally on.

Racer's picture

" 10m

Goldman says the FOMC is likely to downgrade its 2013 growth and inflation numbers moderately."

They say that because that is what Godman suckers told them to do

ParkAveFlasher's picture

Remember when the "key data" was taken like a weather report?  As in, if you can' t tell what's happening by sticking your head out the window, you have problems bigger than the weather.  Remember then?

Dr. Engali's picture

I don't see anything about the upcoming episode of Survivor on there.

GetZeeGold's picture



Is American Idle still going? I haven't been paying attention.

Sudden Debt's picture

download red dawn on youtube to pass the time. I'm doing the same. Beats working on a monday :)


Sudden Debt's picture

that's where the purge will come in handy...

firstdivision's picture

Funny how copper is coming off hard since China stopped some of the fraud they were doing in that market.  Pundents don't seem to point to copper as an "indicator of growth" anymore, I wonder why....

NoDebt's picture

Headline Empire State Manufacturing index just posted a beat at about +6 vs. expectations for zero.  No wonder futures are solidly green.

Of course, the underlying numbers are all WORSE- inventories, employment, new orders.  How dey do dat??

My guess is they banged out a lot of work in the present period and are going to slow down through the summer (or already have).

polo007's picture

Both Keynesians and monetarists believe that increased government spending, or more money injected into the economy, is sometimes necessary. The intervention is in the form of unfunded government spending, artificially low interest rates to boost demand for money and bank credit, or a drive to make the currency “competitive” by lowering it. These methods have been tried unsuccessfully time and again, and they must be denounced if we are to understand our true economic condition.

The reason they don’t work can be summarised as both an oversight and a fallacy. The oversight is to look at only one side of a government spending proposal: a new bridge, hospital or school is a visible benefit. What is easily ignored is the cost, which is spread between many individuals’ savings and earnings. If these resources were not redirected, they would be available to consumers to spend as they see fit. This is important, because it is consumer demand that drives innovation and economic progress, not government redistribution.

The basic fallacy is to subscribe to ideas that are consistent with the cost of production, or the labour theory of value, and to try to shoe-horn it into the reality of consumer price subjectivity. The list of economists who have made this mistake is far longer than those that understand the error, including Thomas Aquinas, Adam Smith, David Ricardo, John Stuart Mill and Karl Marx. It is the bedrock of socialist thought, which divides us pejoratively into the exploited and capitalist classes. The truth is very different: the consumer through his choices decides prices and what is made, and any producer that fails to respond goes out of business.

Therefore the contradictions start from the most basic level, and from there the errors multiply. Instead of abandoning cost-of-production theories, mainstream economists seek to subsidise producers, either directly or by monetary means. It amounts to a subsidy for businesses that would otherwise fail. Furthermore successful businesses are encouraged to seek subsidies and discouraged from redeploying their capital into genuinely profitable investment.

Through relentless government propaganda nearly everyone today believes that state intervention is a force for good, but the truth is very different. Government intervention amounts to reducing wages and destroying savings through monetary inflation, while putting prices up. Admittedly, there can be a short-term artificial boost from lower interest rates and monetary expansion, but this is quickly reversed when prices start to rise.

A reasoned analysis of the true effects of government intervention reveals the truth: it comes at considerable economic cost, disrupting economic progress and leaving us all worse off as a result. Is it any surprise that reflation has now finally ceased to even generate short-term benefits?