Weekly Reports | Oct 14 2011
By Greg Peel
Next week sees the countdown to what all and sundry hope is the unveiling of Merkozy's Plan To Save The World. Markets are expecting some form of Eurotarp to be created by leveraging the EFSF, allowing governments to provide capital support to banks – probably via the ECB – and thus allowing for an orderly default of Greek debt to follow.
The ratings agencies have been in on the act again this morning, with S&P downgrading Spain. Such moves are becoming rather tiresome and one presumes less relevant ahead of the aforementioned unveiling. They nevertheless don't go unnoticed by nervous markets.
The EU summit has been moved from its original scheduling this week to Sunday next week, with EU finance ministers meeting on the Friday before. If we assume European leaders are not going to air their opinions and differences in public this time as they have every other time, causing severe market volatility, then we must wait until at least the end of the week before we learn any more.
Prior to then, next week hots up in the US earnings season stakes with major banks the feature. It's also a busy week for US economic data with retail sales out tonight and thereafter a packed calendar including industrial production, the PPI and CPI, the Fed's Beige Book, housing starts, existing home sales, the Conference Board leading index and the New York and Philly manufacturing indices.
Plenty of grist for the yes-no recession mill.
China is releasing its inflation data today, and next Tuesday its September quarter GDP along with industrial production and retail sales.
Next week in Australia sees vehicle sales, inflation expectations and NAB's quarterly summary of business confidence. The RBA will release the minutes of its October meeting on Tuesday and economists will scour them for more clues of the central bank's policy thoughts, although we've bounced around between cut or not cut expectations ever since. Yesterday's unemployment number put a cut severely in doubt, and the timing of the weekend's EU summit and the G20 meeting immediately after the November RBA meeting should make any sweeping policy decisions potentially untimely.
As we await news out of Europe, the Australian AGM season really hots up next week and more September quarter production reports from the resources sector will be forthcoming.
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.
