- Japan Trade data the only statistical highlight in a rather data thin
day and week; Eurozone Finance Minister's meeting re: Greece and a
run of Fed speakers kick off a busier week on the policy front; May
BBC interview also in focus
- Week Ahead: NATO summit, OPEC meeting and G7 leaders meeting put politics
and policy at top of week's agenda
- Charts: JPM EMBI yield spread, WTI, USD TWI, VIX
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** EVENTS PREVIEW **
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Outside of digesting largely as expected Japanese Trade, the day's statistical schedule offers few distractions for financial markets. The events schedule is rather busier, from sifting over the Trump visit to the Middle East, through a number of Fed speakers to the Eurozone Finance Ministers' meeting that is supposed to deliver a compromise solution to the latest bout of the interminable Greek debt saga. Meanwhile this evening brings a BBC interview with PM May to 'sell' the Tory manifesto, which appears to have put a large dent in the Conservatives large lead in election opinion polls. While Rouhani's decisive victory in the Iranian election offers an encouraging signal that Iran wants to continue its gradual re-integration into the world economy, Trump's speech to Islamic leaders in Saudi Arabia underlined his regime's very hostile attitude towards Iran, and appeared to be an attempt to create an even bigger chasm between the Sunni and Shia. His effective implication that Iran is largely solely responsible for the brutal extremism that purports to be in the name of Islam is frankly preposterous, and looks to have been largely a case of 'follow the money', in other words to secure billions of orders for American industry, in other words far from clearing the swamp, it sticks to a script pursued by most American presidents for the past 50 years. Be that as it may, markets appear to be reverting to the TINA and 'buy any dip' patterns, which have taken deep root in the NIRP, ZIRP, QE era of financial repression.
Recap: The Week Ahead - brief preview: 22 to 26 May 2017
- Overall a rather modest week for data, but a busier one in terms of political meetings, including a Eurozone Finance Ministers meeting on Greece, the NATO Summit, OPEC meeting and the week ending G7 summit, and ironically all coming in the week that marks the 10th anniversary of the start of the Global Financial Crisis. There will also be plenty of focus on Brazil's renewed descent into political crisis, and indeed the UK general election, which, if polls are to be believed, may be rather closer than the coronation event that had been previously assumed, and of course the ongoing saga surrounding the Trump team's links with Russia. The Ascension day holiday on Thursday will thin activity in Europe, while there will be a long weekend due to Monday's holidays in the US (Memorial Day), UK (late Spring Bank holiday) and China (Dragon Boat Festival), which will likely make for a thin session on Friday.
- Statistically there are a raft of revised or more detailed Q1 GDP reports - US, UK, Germany among others; the US has Durable Goods, Advance Goods Trade Balance, New and Existing Home Sales and FHFA House Prices, while Japan has its Trade Balance, CPI and Services PPI, UK sees PSNB budget data, and Australia the first key element of Q1 GDP in Q1 Construction Output. Otherwise there are a raft of business and consumer surveys including G7 flash Manufacturing and Services PMIs, Ifo Business Climate and UK CBI Distributive Trades.
- Central Banks: the May FOMC minutes are accompanied by a goodly volume of Fed speak, with even the more dovish Fed members recent comments still suggesting a further rate hike in June is distinctly on the cards; there are also a number of ECB speakers. The Bank of Canada is expected to leave rates on hold, with markets watching what is said about the country's mortgage sector woes. Elsewhere, the Bank of Korea is seen on hold, central banks in Ghana and Colombia are seen cutting rates by 75 bps and 25 bps respectively, while rates are seen on hold in Nigeria.
- Corporate Earnings: Marks & Spencer, Medtronic, Abercrombie & Fitch, Costco, DollarTree, GameStop, HP, Lowe's, Tiffany and Toll Brothers are among the highlights.
from Marc Ostwald
