Key Events In The Coming Week And... Bonds, PIIGS Bonds
Via Goldman, here are the key economic events to look forward to in the coming relatively quiet week. And out of DB, we get a list of the key PIIGS bond auctions and bailout events in the immediate and near-term future.
For the week ahead we will be watching Chairman Bernanke's testimony in the Senate and the House, the first slew of US survey data for July (Empire, Philly Fed), and finally progress on the Spain bank bailout, with the MoU scheduled to be signed on Friday.
Monday 16 July
- India Wholesale Price Index (June): We expect June WPI inflation to come in at 7.2% yoy (Bloomberg consensus: 7.61% yoy), from 7.55% yoy in May, primarily on account of lower oil prices. We expect primary articles inflation to continue to remain elevated, on account of a higher food prices sub-component, due to adverse seasonal factors.
- Euro-Zone CPI (June): We expect 2.4%(yoy) vs consensus expectations of no change from last month with a reading of 2.4%.
- US Retail Sales (June): Weak same-store sales numbers point to a decline in retail sales in June. We expect a slight decline of -0.1% mom, following the decline of -0.2% in May. Consensus expects a rise of 0.2% mom.
- US Empire Manufacturing (July): Consensus is looking for a reading of 4.0, up from a reading of 2.3 in June.
- New Zealand CPI (2Q): Consensus expects 0.5% qoq, the same pace of inflation as in Q1.
- Australia (July): RBA Board minutes
Tuesday 17 July
- US CPI (June): We forecast that headline and core consumer prices rose modestly in June. We expect 0.14% mom in CPI inflation, while consensus is looking for a flat reading.
- UK CPI (June): We are in line with consensus and expect no change from last month's reading of 2.8% yoy.
- US IP (June): In line with consensus, we expect a rise of 0.3% mom, following a drop of -0.1% mom in May.
- Canada Central Bank Meeting: We expect the Bank of Canada to remain on hold at 1.0%, in line with consensus.
- US: Chairman Bernanke gives monetary policy report to Senate Banking Committee
- Euro zone: Participation by Joerg Asmussen, ECB Executive Board member, at a policy briefing entitled “Building deeper economic union: what to do and what to avoid” organised by the European Policy Centre in Brussels, Belgium.
Wednesday 18 July
- UK: Bank of England Minutes
- Malaysia CPI (June): We expect June inflation to remain benign at close to the previous month’s level of 1.7% yoy (consensus 1.6% yoy). Inflation trends will likely remain benign for most of the year, as moderating growth keeps core CPI inflation contained. In the last central bank statement, Bank Negara Malaysia reiterated its expectation that inflation will remain modest for the year.
- US Housing Starts (June): We expect a 5.0% mom increase in housing starts, essentially in line with consensus of 5.2%, following the drop of -4.8% in May.
- US: Bernanke gives monetary policy report to House Financial Services Committee
Thursday 19 July
- Spain and France Bond Auctions
- US Initial Jobless Claims (July 14): Bloomberg consensus expects a slight increase to 365k from 350k last week.
- US Existing Home Sales (June): We expect an increase of 1.0% mom versus consensus of 1.5% mom.
- US Philly Fed (July): We are looking for a reading of -12.0 (consensus -8.0), following the -16.6 June reading a month ago.
- South Africa Central Bank Meeting: Consensus is looking for an unchanged policy rate at 5.5%.
Friday 20 July
- Mexico Central Bank Meeting: Consensus expects the policy rate to remain unchanged at 4.50%.
- Euro zone: Signing of the Memorandum of Understanding (MoU) of the Spain bank bailout.
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And just as importantly, here is the European forward bond issuance calendear and key European bailout events.
- 13 July: Italy auction. Bonds.
- 17 July: Spain auction. Bills.
- 17 July: Greece auction. Bills.
- 19 July: Spain auction. Bonds.
- 20 July: Eurogroup meeting. A new Eurogroup meeting to approve the planned Spanish banking recap has been pencilled in for 20 July. According to the draft MoU on Spanish bank recap the first tranche of the loan totalling EUR 30bn will be prefunded before the end of July and kept in reserve by the EFSF (see Focus on Spain article in this edition of Focus Europe). This tranche could then be used for unexpected interventions if requested by the Bank of Spain prior to the planned European Commission approval of recapitalisation plans in autumn 2012.
- 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 will 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.
- Late July: Italy ESM approval. The upper house of Italy’s parliament (the Senate) approved both the Fiscal compact and the ESM on 12 July. The process will now move to the lower house, the Chamber of Deputies, which is aiming to give its approval by 20 July according to Reuters.
- 2 August: Spain auction. Bonds
- 2 August: ECB Governing Council meeting, followed by interest rate announcement and news conference.
- 13 August: Italy auction. Bills
- 14 August: Italy auction. Bonds
- 16 August: Spain auction. Bonds
- 21 August: Spain auction. Bills
- 28 August: Spain auction. Bills
- 28 August: Italy auction. Bonds
- 29 August: Italy auction. Bills
- 30 August: Italy auction. Bonds
- late August/September: German Constitutional Court ESM ruling (Tentative). The German Constitutional Court is to rule on the complaints lodged against the ESM and fiscal compact. The possibility of the court obstructing approval of the ESM is unlikely given the broad ratification in the German Parliament with three-quarters of MPs voting in favour. However, in the public hearing on July 10 the court stated its intention to closely examine the complaints suggesting that the ruling will take longer than the three weeks usually required to rule on an injunction. The German Finance Minister Wolfgang Schaueble has expressed hopes that judgement would be passed before autumn. Given that Italian ratification is expected by end of July (see above), Germany is likely to be the last approval needed for the ESM to come into effect. Then the first installment of the capital has to be paid by the ESM members within 15 days of the ESM treaty entering into force.
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