Weekly Reports | May 25 2012
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
We enter next week in another state of euro-limbo as we count down towards the June 17 Greek election. There seems to be some hope the Greeks might have a change of heart and vote to “stay in the euro” but this seems awfully misguided to me, given the leading parties all have a platform of staying in the euro but all seem to think they can do so without the austerity that goes with it. Just as US politicians and officials always promote “a strong dollar” publicly while urging the Fed to hurry up and print behind the scenes, global leaders have been urging Greece to stay put while hurriedly drawing up exit contingency plans.
The question then becomes one of “orderly” or “disorderly” with the former implying a gradual process over many months. Problem is you can't tell the Greeks their euros will turn into drachmas, with about a quarter of the value, in a few months time or there won't be one eurocent left in the country, other than under mattresses and buried in backyards. The currency devaluation will need to be done suddenly, without notice, in the dead of night on a weekend when the banks are closed.
It's those sorts of issues which are currently being debated and planned for from Berlin to Brussels and London to Washington. Meanwhile, the global economic data releases roll on.
Monday is the Memorial Day holiday in the US and all markets are closed. Over the rest of the week the US will see the Case-Shiller house price index, consumer confidence, pending home sales, chain store sales and, importantly, the May unemployment numbers. The March quarter GDP result will also be revised on Thursday.
Friday is the first of the month, meaning its global manufacturing PMI day.
Ahead of Australia's PMI we'll see retail sales, which might be interesting, building approvals and private sector credit.
