20 Must-Watch Market Events In The Coming Week
Markets are beginning to understand that there was virtually no meaningful progress, just another series of plans to make plans, without any of the necessary funding or agreement on implementation. See IGNORE ALL RALLIES ON EU CRISIS "SOLUTIONS" UNTIL THREE THINGS CHANGE for a quick summary of why the summit was virtually meaningless, and PRIOR WEEK: 17 REASONS TO FADE THE EU SUMMIT EUPHORIA RALLY for a more detailed explanation.
Most of the buyers for recent Spanish bond sales have been Spanish banks, so if they don’t get funding, Spain’s government will be unable to sell bonds, as no one else will buy them.
Meanwhile, Spain and Italian Bond Yields Continue To Move Higher: Yields on Spain’s 10 year bonds are over the 7% redline that typically signals it needs a bailout because it can’t afford to borrow from capital markets
The Portuguese constitutional court struck down a plan
The Portuguese constitutional court struck down a plan by the government to cut certain public sector benefits. It won’t make a huge impact on Portugal’s deficit cutting to 3 percent of GDP this year. To put it more exactly, it suggests the government’s inefficiency and inability to make credible reforms.
Finland has said it will block the ESM from buying government bonds to reduce borrowing costs for troubled countries like Spain and Italy. Holland has considered going along with this plan, too. Past sovereign bond purchases by the European Central Bank have been ineffective. During their resistance to the idea makes sense, eliminating this tool will on the whole be seen as bearish. During these nations alone may not have enough clout to block the measure, their opposition undermines confidence in the EU and may even encourage another funding nation to join them.
These are unsustainably high, furthermore undermining credibility of GIIPS ability to recover, both in the eyes of markets and funding nations, whose voters increasingly want to be rid of ongoing and furthermore obligations to the GIIPS.
Next week kicks off Q2 revenues reporting season. The only big names are Alcoa and Yum Brands Monday, and JP Morgan-Chase Friday. Both Alcoa and Yum are a bellwether multinationals, and JPM provides a first measure of the banking sector.
After three major central banks eased monetary policy last week, investors will study the latest Federal Reserve policy meeting minutes, for hints about a furthermore round of asset purchases.
Other potentially market moving events on the calendar that were not already mentioned come late in the week. The top events include:
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