In a development that is too hilarious for even the most hardened cynics to pass by, starting today, the rotating presidency of the EU will be handed over to... broke Cyprus. We learn this and much more about the onslaught of sovereign debt auctions out of Spain and France in the month of July (explaining the urgency to come up with any mechanism to keep Spanish and Italian bond yields below 7% as absent some deux ex, no matter how temporary, the whole charade may have ended as soon as 31 days from today) courtesy of the following calendar of key events out of Europe.
From Deutsche Bank
- 1 July: Cyprus becomes EU President. Cyprus will resume the six-month rotating presidency of the EU.
- 4 July: Merkel to meet Monti in Rome.
- 5 July: ECB Governing Council meeting, followed by interest rate announcement and news conference. We expect a 25bp policy interest rate cut. The ECB may be reluctant to cut the deposit rate to zero. With easier collateral rules already announced on 22 June and the next Bank Lending Survey not due until 2 July, the policy moves on 5 July could be restricted to the cut in interest rates.
- 5 July: Spain auction. Bonds.
- 9-10 July: Eurogroup/ECOFIN finance ministers meeting. 9 July is to be the start date for ESM, successor to EFSF. This is also the date on which the Eurogroup is to formally approve the MoU on Spanish bank recapitalisation aid. Additionally, we might get more clarity on the interest rate charge that will come with the capital injection and on the duration of the loan.
- 10 July: Greece auction. Bills.
- 12 July: Italy auction. Bills.
- 13 July: Italy auction. Bonds.
- 17 July: Spain auction. Bills.
- 17 July: Greece auction. Bills.
- 19 July: Spain auction. Bonds.
- 24 July: Spain auction. Bills.
- 25 July: ECB lending survey. The ECB is due to publish its third lending survey of the year on Wednesday 25 July. The survey could provide the ECB with a key piece of evidence to justify additional 3Y LTROs — if lending standards tighten again, another liquidity push may be necessary to avert a harsher credit crunch. The ECB plans to publish one more lending survey this year, on 31 October.
- 26 July: Italy auction. Bonds.
- 27 July: Italy auction. Bills.
- 30 July: Italy auction. Bonds.