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Week Ahead: hankering for a volatility-ending master plan

Our preview of the big financial events in the coming week.

 

That won’t stop the rumours and hypothesising over the coming weeks, which has made for volatile markets.

‘The guessing on the big master plan to be discussed at the EU summit at end-June will continue and we could see another week in which eurozone policymakers, directly or indirectly, could float various ideas,’ say ING Bank economists in a note.

Before the summit though, markets will get the results of the Greek election on 17 June. Over the coming week, as in the past week, Greece will remain in the shadows, owing to an opinion poll blackout ahead of the elections.

All of this uncertainty is keeping many individual investors on the sidelines. Citywire columnist Rob Kyprianou admits in his latest update – to be published on Citywire on Monday – that he is ‘scratching his head while sitting on the fence’.

In the absence of any major announcements, there is plenty of other data due in the coming week to shift markets.

China’s raft of economic data this weekend will set the tone for markets in the coming week. And following Thursday’s rate cuts, it isn’t expected to be pretty.

After Spain passed a test of market morale by successfully selling off government bonds last week, it’s now the turn of Greece, Germany and Austria.

In the UK chancellor George Osborne and Bank of England governor Mervyn King are both due to deliver speeches at the annual Mansion House dinner on Thursday. This is not an arena for making policy announcements, but their comments will be closely watched. Industrial production figures are also due on Tuesday for the UK, providing further clues as to the state of the UK's economic recovery.

And in the US, the strength of the economy in the face of the eurozone crisis will again be tested with retail sales (Wednesday), consumer sentiment data (Friday) and industrial production numbers (Friday) among the headline releases.

The eurozone also has industrial production figures due next week, on Wednesday, with inflation stats for the euro bloc due on Thursday.

Optimists might point to one event that could mean many Europeans simply won’t pay attention: the Euro 2012 football championships. ‘Volumes traded in a country’s stock market dropped 55% on average when that country’s team was playing a World Cup 2012 match,’ the ING eZonomics team reminded us this week.

FTSE Diary

It's supermarket reporting time on the FTSE 100. On Monday Tesco (TSCO.L) is due to deliver a trading statement.

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3 comments so far. Why not have your say?

snoekie

Jun 09, 2012 at 13:01

Merkel, "she was poised to take action", yep sit back and allow the pressure to build so Germany will be uber alles and then rake in the profits for senturies to come!

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Prof Eman

Jun 10, 2012 at 10:46

I am not sure that it is in Merkel's interests to resolve the Euro problem, because of its effect on the exchange rate. If they had Deutch marks the exchange rate would be much different and make their exports dearer. So the problems of the euro allow Germany to ride out the recession storm better. The situation is almost similar to currency manipulation of China.

Coupled to that is the opportunity for Germany to buy up businesses abroad on the cheap, and move production home, giving employment, or alternatively giving profits.

No real solution to the problem is thus in my opinion on the cards. More sticking plaster is the best we can hope for.

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Harry Brooks

Jun 10, 2012 at 13:38

She says 'we need more Europe'. What's she going to call it: the Fourth Reich?

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