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Macro Weekly Preview: 19th Jul - 25 Jul

 Europe Stress Test

·      23 Jul: Stress Test Results

·      Consensus is that the stress test will not provide meaningful indications about the financial position of European banks given the marginal haircut on sovereign debt

·      Emphasis will be on the policy response of the ECB following the release of the results

Eurozone Key Statistics

·      22 Jul: Consumer Confidence, PMI

·      Following disappointing economic data from China and the US, the focus now turns to Europe


US Key Statistics

· 20 Jul: Housing Starts                  

· 22 Jul: Leading indicators, Existing home sales

· Market will be looking out for further indications on the pace of recovery

· Leading Indicators -- Economist are posting the first negative estimate since March ‘09


Earnings Season Continues

· Earnings season continues, with greater emphasis on Tech companies and heavy industrial names

· 20/23 companies have topped EPS estimates thus far, but have failed to offset the effects of negative macroeconomic data. Revenue growth remains muted at ~2 % 

South Korea GDP

25 Jul: GDP Q2 YOY

The recent rate hike surprised many and signals confidence within the domestic economy

GDP data may provide indications about the timing of the next policy rate hike

Japan’s political economy

· DPJ is actively seeking a coalition so as to proceed with an overhaul of its tax system

S&P warned of a sovereign downgrade if political environment does not stabilize, leading to uncertainty in economic policy and a further deterioration of fiscal condition

SG, HK, MY Inflation Data

21 Jul: Malaysia CPI YOY            
·      22 Jul: Hong Kong CPI YOY             
·      23 Jul: Singapore CPI YOY
·      None of these countries practice explicit inflation targeting policies
·      SGP -- Inflation is at a 14-month high, but do not expect a further upward revaluation of the currency

Spanish bank capital injection

·      Spanish government is relaxing regulation over its bank rescue fund

·      Likely to be approved this week, allowing the FROB to borrow up to €90 Bn under Govt. Guarantee


Basel III Developments

·      Potential changes in terms of implementation dates and the extent to which leveraged rations will be enforced

Disclosure: No Positions