Week ahead: looking beyond Greece
Most of next week will most likely be spent digesting the Greek election results and (the chance of) possible stimulus measures, but looking beyond that there are quite a few interesting entries in the calendar.
Central banks are no doubt prepared for also co-ordinated action, if such is required early in the week. If it is not, also the Fed many stick to an extension of its so called Operation Twist at the conclusion of its meeting on Wednesday.
The G20 countries, in turn, will have a chance to ponder the Euro-zone debt crisis on Monday and Tuesday. At the very least, the countries should be able to seal the increase in the IMF’s resources. In any case, prepare for a lot of uncertainty and volatility, as sentiment swings may be notable.
Flash June PMIs for the Euro-zone on Thursday will be of utmost importance, as another drop would further darken the economic outlook of the zone and likely cement further easing measures from the ECB. There is no denying the fact that the Euro-zone economy faces very tough times ahead, and the PMIs will probably offer further evidence that in the short term, the Euro-zone economy will contract. Weak economic performance, in turn, will only add to worries that current debt levels are not sustainable in a number of countries.
On the issuance front, most focus will centre on the Spanish bonds auctions on Thursday, while the country will sell bills already on Tuesday. Also Greece is set to sell bills on Tuesday, while Germany will re-open its 2-year benchmark on Wednesday and France will sell 2-5-year bonds and linkers on Thursday.
Read more in the full report below.