Next Week At A Glance

This story features JAMES HARDIE INDUSTRIES PLC, and other companies. For more info SHARE ANALYSIS: JHX

For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.

By Greg Peel

Some time between now and the fresh Greek election on June 17, one presumes, we will hear news from Europe as to what the powers that be plan to do on the assumption Greece continues to reject austerity. In parallel, and much related, will be any news from Germany regarding a change in heart on austerity versus growth to appease not only the new French president but the entire eurozone. If Merkel does bow to the wider pressure, such that the earlier fiscal pact of harsh budget cutting is reassessed, then presumably Germany can use tempered policy as a carrot for the next Greek government, assuming there is one.

In other words, Merkel may be able to find a way to keep Greece in the eurozone. As to whether this is the best longer term outcome is another debate. Short term, what the eurozone has to worry about is the increasing outflow of euros from Greek banks turning into a flood and sparking similar runs in Spain, Italy et al. Action must be taken before the Greek election, and whatever that action is will then determine what the ECB might do. It's a bit hard for the ECB to determine monetary policy requirements right now while fiscal policy is up in the air.

As for the markets, it seems now just a case of staying away until either the correction reaches a sufficient level to tempt in buyers or news from Europe offers new hope. This is more of an uncertainty correction than a certainty of weakness correction. 

US economic data flow throughout the last month has been, for the most part, positive, serving to strengthen the flow of funds into the reserve currency safe haven while at the same time undermining commodity prices. There is another decent round of US data next week, which includes existing and new home sales, a house price index, indices from the Richmond and Chicago Feds and durable goods orders.

On Tuesday HSBC see release its flash estimate of China's May manufacturing PMI which in the current climate will not want to reflect a drop. The eurozone will see its composite PMI estimate revealed this week along with Germany's IFO survey of activity.

It will be a quiet week economically for Australia with Westpac's leading index measure the highlight.

On the local stock front we'll see results from James Hardie ((JHX)) and Graincorp ((GNC)) and the AGM season will pick up pace.

Before then, however, stand by for all the razzamatazz as Facebook opens for trading in New York tonight. 

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