This page has been archived and commenting is disabled.

Key Events In The Shortened Week

Tyler Durden's picture





 

Despite closed US stock markets today, FaceBook stock still managed to decline, while Europe dipped yet once again on all the same fears: Greece, Spain, bank runs, contagion, etc. Shortly Europe will reopen, this time to be followed by the US stock market as well. While in turn will direct market participants' attention to a shortened week full of economic data, which as Goldman says, will likely shape the direction of markets for the near future. US payrolls and global PMI/ISM numbers are expected to show a mixed picture with some additional weakness already fully anticipated outside the US. On the other hand, consensus does expect a moderate improvement in most US numbers in the upcoming week, including labour market data and business surveys. As a reminder, should the Fed wish to ease policy at its regular June meeting, this Friday's NFP print will be the last chance for an aggressive data-driven push for more QE. As such to Zero Hedge it is far more likely that we will see a big disappointment in this week's consensus NFP print of +150,000. Otherwise the Fed and other central banks will have to scramble with an impromptu multi-trillion coordinated intervention a la November 30, 2011 as things in Europe spiral out of control over the next several weeks. Either way, risk volatility is most likely to spike in the coming days.

More from Goldman's FX team:

In terms of policy meetings, the performance of two high-yielding currencies could get influenced by central bank meetings. In Brazil, BACEN is expected to cut rates to a record low level of 8.50%, while in Turkey CBRT will likely be on hold but could twist its macro prudential tools. The combination of significantly stepped-up FX intervention by the Brazilian authorities to stabilise the BRL below $/BRL 2.10 and a likely rate cut will be interesting to watch as both seem to work in opposite directions. A similar change in FX policy may have occurred in India last week. After substantial INR weakness, stepped-up rhetoric and a series of measures appears to have stabilised the INR – at least for now. However, the underlying external imbalance remains large and hence the path of the INR will depend on the RBI’s willingness to deploy part of their sizable FX reserves.

Finally, the latest twists in the Eurozone crisis will remain important for most FX investors. Very little additional information can be expected out of Greece until after the elections. Our base case is that Greece will stay in the Eurozone at the very least until a stable government has been found. Still, the situation for the Euro remains tricky with weak activity data on one hand and substantial unwinding risks of sizable short positions on the other.

Linked to the Greek situation it is also worth keeping an eye on EUR/CHF, which has displayed more intraday volatility in recent days, possibly a sign that the authorities are worried about spot remaining extremely close to the 1.20 intervention level.

Tue, May 29th

  • Japan Labour Market Data (Apr): We forecast an increase to 0.77X for the job offers/seekers ratio, while the unemployment rate has likely remained unchanged (GS 4.5% , consensus 4.5%, last 4.5%).
  • Japan Retail Sales (Apr): Retail sales have likely been close to flat mom in April. (consensus 0.1% mom, last -1.2%)
  • Turkish Central Bank Meeting: Consensus expects the rate to stay on hold at 5.75% but CBRT could attempt to tighten front end liquidity to stabilise the currency, while easing via credit tools at the longer end of the curve.
  • South Africa GDP (Q1): GS expects +2.8% qoq ann growth in Q1 (consensus 2.1% qoq ann, last 3.2% qoq ann).
  • German Consumer Price Inflation (May): Consensus expects stable prices since April (consensus 0.0% mom, last 0.1% mom).
  • US Consumer Confidence (May): On the Conference Board measure we expect a small decline (GS 68.5, consensus 69.5, last 69.2).
  • Also Interesting: US Case Shiller Home Prices (Mar), Dallas Fed Manufacturing Activity (May), Bank of Portugal Financial Stability Report, Hungary
  • MPC Meeting (GS: on hold).

Wed, May 30th

  • Australia Retail Sales (Apr): Consensus 0.2% mom, last 0.9% mom.
  • Canada Industrial Production (Apr): Consensus 0.1% mom, last 0.2% mom.
  • Brazil FX Flow Data for the previous week: Given the big swings in recent days, it will be interesting to get a better sense of what kind of flows have hit the market.
  • Brazil Central Bank Meeting: We and consensus expect BACEN to lower the SELIC target rate by 50bp to a record low of 8.50%.
  • Speeches: ECB’s Draghi, Fed’s Dudley, Fed’s Fischer
  • Also Interesting: Eurozone Money Supply (Apr), US Pending Home Sales (Apr), Sweden GDP (Q1).

Thu, May 31st

  • Japan Industrial Production (Apr): Materialization of downside risk in external demand, particularly China demand, has cast a shadow over production growth. We forecast that growth continued at only 0.1% in April (GS +0.1% mom, consensus +0.5% mom, last +1.3% mom).
  • UK Consumer Confidence (May): Consensus -32, last -31.
  • India GDP (Q1): We expect 4QFY12 GDP growth to remain flat at 6.1% yoy (consensus 6.0% yoy, last 6.1% yoy), bringing down our FY12 forecast by a notch to 6.7% yoy. This is on the account of real activity remaining weak this quarter, seen in related indicators such as industrial sector growth and trade; also reflecting in the poor readings of business survey indicators.
  • German Labour Market Data (May): After last months increase in unemployment, consensus expects a renewed decline in the number of jobless workers (Consensus -7k, last +19k).
  • Eurozone CPI (May): Consensus 0.1% mom, last 0.9% mom.
  • US Weekly Claims/ADP Survey (May): The continuing claims number of this survey and the ADP estimates will help fine-tune the estimates for the payrolls numbers on Friday. While consensus expects the weekly claims numbers to remain unchanged again, the estimates are for an improvement in the ADP number to +140k from +119k).
  • Chicago PMI (May): Similarly to consensus, we expect a marginal improvement from April (GS 57, consensus 57, last 56.2).
  • Also Interesting: Korea Industrial Production, German Retail Sales, Brazil IP, US GDP (second estimate).

Fri, June 1st

  • South Korea Trade Balance (May): As every month, South Korean export numbers will be the first actual data point in global demand during the previous month.
  • Indonesia Inflation (May): With recent currency weakness putting pressure on fixed income investments by foreigners in Indonesia, inflation could be an additional risk factor.
  • India Trade Balance (Apr): With substantial pressure on the INR in recent weeks, markets will likely focus on the latest Indian trade data.
  • Global Manufacturing PMIs (May): With global cyclical momentum slowing, the full batch of global PMIs will likely confirm slowing momentum as already indicated by “flash” readings and regional/national surveys.
  • US Manufacturing ISM (May): Regional manufacturing surveys mostly softened in May, pointing to a slight weakening in the ISM (GS 53.5, consensus 53.9, last 54.8).
  • Canada GDP (Q1): Consensus 1.8% qoq ann, last 1.8% qoq ann.
  • Brazil GDP (Q1): The economy remains weak despite the fiscal and monetary stimulus already delivered to the economy. The sluggish performance of the economy reflects the poor performance of the industrial and other tradable sectors and likely also to the fact that imports are increasingly satisfying part of the final demand growth (GS 0.5% qoq, consensus 0.5% qoq, last 0.33% qoq).
  • US Non-Farm Payrolls (May): We forecast that nonfarm payroll employment increased by 125,000 in May, given continued weather “payback” (consensus +150k, last +115k). We expect the unemployment rate to remain unchanged.
  • Also Interesting: Japan Capital Spending (Q1).

 

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 05/28/2012 - 17:40 | Link to Comment barliman
barliman's picture

 

A late afternoon aperitif as an opener for the week presented without additional encumberments.

Spain May Use Its Debt Instead of Cash for Bankia Group

http://www.bloomberg.com/news/2012-05-28/spain-considers-injecting-debt-instead-of-cash-into-bankia-group.html

Spain is considering using debt issued by the government or its bank-rescue fund instead of cash to prop up the Bankia group, adopting a mechanism that would free it from raising the money from investors.

The government hasn’t made a decision on whether to use its debt to recapitalize the nationalized lender and will decide in two or three months, a spokesman for the Economy Ministry, who asked not to be named in line with its policy, said in a phone interview today. Prime Minister Mariano Rajoy said at a Madrid news conference today the government hadn’t spoken to theEuropean Central Bank about such a step.

barliman

Mon, 05/28/2012 - 17:51 | Link to Comment The Swedish Chef
The Swedish Chef's picture

They´re re-capitalizing a bank with PIIGS debt?!?

Mon, 05/28/2012 - 18:23 | Link to Comment barliman
barliman's picture

 

How could this go wrong?

Oh, yeah ...

Spainish bonds versus German bonds just gapped above 450 basis points

http://www.zerohedge.com/news/spain-bund-spread-just-broke-450-bps

Next up, Spainish officials to explain how they will use the "vig" to restore confidence in their banks ...

barliman

Mon, 05/28/2012 - 21:13 | Link to Comment rocker
rocker's picture

Better Yet, Watch for Currency Intervention by the Swiss National Bank on or before June 15.

In order to stop others from manipulating their currency.

They could stop the sale of U.S. Dollars. Hence, one can not buy Swiss Francs with those U.S. Dollars sold. 

Hmmmmmm.   

Tue, 05/29/2012 - 02:19 | Link to Comment The Monkey
The Monkey's picture

The market wants to rally. Hopefully it can get off the mat this week. What we need: higher prices.

Mon, 05/28/2012 - 18:54 | Link to Comment vast-dom
vast-dom's picture

 

Facebook founder Mark Zuckerberg and his then wife-to-be obviously had a stroll on a Shanghai street. Which was shanghaied into a Chinese police documentary @ 00:29. Totally random and unintended.

  •  

 

 

 

http://www.youtube.com/watch?v=qDfiJHwOAw0&feature=player_embedded

 

I thought i was smoking crack too much this memorial day weekend but alas......did i make this shit up?

Mon, 05/28/2012 - 17:44 | Link to Comment LeonardoFibonacci
LeonardoFibonacci's picture

Run, run for your lives, the zombies are coming.  Markets are gonna crash these next few days!

Tue, 05/29/2012 - 02:22 | Link to Comment The Monkey
The Monkey's picture

I hope not. All my shorts are closed. Time for a rally.

Mon, 05/28/2012 - 17:50 | Link to Comment veyron
veyron's picture

Where does ZH get all of these goldman reports?  is GS explicitly sending it to the tylers?  Are the Tylers actually employees of goldman sachs?  WE NEED ANSWERS! 

Mon, 05/28/2012 - 18:05 | Link to Comment THX 1178
THX 1178's picture

Apparently, the people at the top of the hierarchy, through some strange mechanism of their system of rules, must tell the public what they do before they do it. Maybe ZH is one appendage of that... no one knows who the Tylers are...

Tue, 05/29/2012 - 02:51 | Link to Comment TWSceptic
TWSceptic's picture

Didn't you guys ever watch Fight Club? Tyler Durden is the split personality of Lloyd Crag Blankfein and Jamie Demon.

Mon, 05/28/2012 - 17:59 | Link to Comment Venerability
Venerability's picture

Tyler,

While this is a Market Mechanics issue, it could affect other pieces of the puzzle: There are all of a sudden - totally unexpected - a whole bunch of hints from PM sector gurus that we are finally - it has taken forever - possibly to get some M&A among major PM sector index component companies. With everything so cheap, it has made sense for months now. And suddenly, hints that someone or other - Frisco? Fresnillo? Freeport? NEM? - is about to bite the bullet and bid.

If it pans out, Miners Leading is always - that's ALWAYS - better for the underlying metals than things happening the other way around.

So a totally mechanical Gold and Silver move may be dead ahead, which in turn tends to shake up currency markets in unexpected ways.

Mon, 05/28/2012 - 18:07 | Link to Comment gatorengineer
gatorengineer's picture

I think the market drivers are now outside of the regularly scheduled News.  Spain going further record wide, liquidity locking up further in europe, Italian banks.  There are some counterparties to these that must be getting a wee bit uncomfortable.  JPM still I think laying a gargentuan egg, Moodies US bank downgrades, etc, etc........

In essence, I think the snowball is now self propelled at this point and is heading down the mountain picking up speed and size.....

There is a china print shortly, and a few other positive easter eggs possibly.....

 

 

Mon, 05/28/2012 - 18:12 | Link to Comment theTribster
theTribster's picture

Remember that there is a referendum on the Irish docket for the 31st, last I checked the polls had the leaning towards approving the EU Fiscal Pact. Who knows, they have the Greeks starting to lean towards the previous parties that screwed them! I'm not sure that the media isn't just lying once again to influence people before they actually vote. I'd hate to see the Greeks stay in the EU, same is true for Ireland. How could any population think its a good idea to have 70-80% of their laws dictated by unelected technocrats that don't even live there? Hopefully this is just a misrepresentation of reality, which MSM is good at doing.

Mon, 05/28/2012 - 18:31 | Link to Comment nudlee
nudlee's picture

"Tue, May 29th

....

Also Interesting: US Case Shiller Home Prices (Mar), Dallas Fed Manufacturing Activity (May), Bank of Portugal Financial Stability Report, Hungary"

What is up with Hungary there Tyler?

Mon, 05/28/2012 - 18:37 | Link to Comment valley chick
valley chick's picture

when does the "market" look at data anymore?

Mon, 05/28/2012 - 19:02 | Link to Comment barliman
barliman's picture

 

That's a puzzler ...

... probably right before they have their own "Oh, shit!" moment

http://ciroccoj.livejournal.com/1182529.html

Item 3

barliman

 

Mon, 05/28/2012 - 19:08 | Link to Comment q99x2
q99x2's picture

'risk volatility is most likely to spike in the coming days.'

I'm holding the market to your word because you're pretty darn accurate.

"most likely" I like that. Bring down the curtain.

Mon, 05/28/2012 - 19:38 | Link to Comment tom a taxpayer
tom a taxpayer's picture

The day All Hell Breaks Loose can be penciled in the calendar. My guess is that day will be before the Greek elections on June 17, as tensions and uncertainty reach a breaking point, and as it becomes apparent to everyone that no matter what the outcome of the Greek elections, the Euro system, however well-intentioned, is now an unsustainable and failed experiment.

Because of the modern marvel of electronic banking, a large part of bank runs occurs in cyber-space.

 

 

Mon, 05/28/2012 - 19:54 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

The looming mass arrests of U.S. bankster-politicians from Obama and Brenanke on down will make Greek and European troubles seem about as significant as a fart on a windstorm. Listen to the middle hour of the "Drake interview" if you dare...

http://tinyurl.com/cd5cyjo/

Mon, 05/28/2012 - 21:32 | Link to Comment Occams Aftershave
Occams Aftershave's picture

you missed the biggest key event of the week:  FB options start trading !

Mon, 05/28/2012 - 23:30 | Link to Comment Gamma735
Gamma735's picture

Are the futures up tonight? 

Tue, 05/29/2012 - 00:51 | Link to Comment Arnold Ziffel
Arnold Ziffel's picture
Law firm Dewey files for chapter 11, seeks liquidation

 

The New-York based firm listed liabilities in the range of $100 million to $500 million, according to the filing.

The U.S. Pension Benefit Guaranty Corporation filed suit this month to take control of three of the firm's pension plans, which the agency said were underfunded by $80 million.

 

http://finance.yahoo.com/news/dewey-leboeuf-files-chapter-11-015330083.html

Tue, 05/29/2012 - 02:48 | Link to Comment Nussi34
Nussi34's picture

Banks closed for a week in Greece & Spain is missing!

Wed, 05/30/2012 - 07:54 | Link to Comment boa74520
boa74520's picture

Air cushion technology has more than once let its shoe get the favour of many sports fans, whether professional air max nike series and pure and fresh running shoes or Air Max series etc, they are all Air Max 2012 Womens shoes fans true love. Recently the special use Nike Air cushion technology to everyone launched a new Air Flow Summer sports shoes

Do NOT follow this link or you will be banned from the site!