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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