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Key Events This Week: Sintra Jawboning Orgy, PMIs And Non-Stop Central Bank Speakers

Courtesy of ZeroHedge. View original post here.

Following what was widely dubbed as "the most important week of the year", which saw major announcements by both the Fed and ECB, things slow down sharply but central banks remain in the spotlight again with the ECB's Forum on Central Banking due to take place in Sintra, with speakers including Draghi, Powell and Kuroda amongst others. We'll also have the BoE policy meeting, while the other potentially big event for markets is a likely contentious OPEC meeting in Vienna where ministers are due to discuss a possible lift in output. Global flash PMIs at the end of the week is likely to be the big data highlight.

In the US, newsflow slows down, with the Philly Fed mfg index expected to moderate in June, but still remain at elevated levels. On the flip side, May housing starts and existing home sales are expected to rebound. Fed Presidents Bostic and Williams, and Fed Chair Powell speak next week. We will listen for clues around their views on the path of policy. Bostic likely remains a 3-hiker for 2018, while Williams and Powell may both be at 4.

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In its preview, Deutsche Bank – the bank which has the most to lose from Draghi's ongoing dovish crusade as it will keep yield curves subdued for the next year – writes the ECB's Forum on Central Banking which runs from Monday to  Wednesday in Sintra is likely to be the big event for markets. Remember that it was this time last year that bond yields rose sharply higher when Draghi signaled that the ECB was poised to phase out its economic stimulus measures. In terms of the agenda itself, on Monday evening President Draghi will deliver opening remarks followed by a speech from former US Secretary of State Lawrence Summers. On Tuesday morning Draghi will then make the introductory speech, before board member Peter Praet speaks in two separate panels, the second including the Fed's Bullard and ECB's Lane. Finally on Wednesday we'll hear from ECB board member Sabine Lautenschlager in the morning and then Benoit Coeure. The main event might well come on Wednesday afternoon however when we get to watch a policy panel featuring Draghi, Fed's Powell, BoJ's Kuroda and RBA's Lowe.

However, as Jim Reid writes elsewhere, chances are that coming so close after the big ECB meeting, it’s unlikely to have the same impact on markets as it did this time last year when Draghi announced that the ECB was ready to start phasing out extreme monetary stimulus. However it’s a true A-list gathering of Central Bankers that makes the casting agents of Ocean’s Eleven look like they ran out of money. As such headlines will be aplenty.

Meanwhile, we'll have to wait until Friday to get the main data point for the week when the flash June global  PMIs will be out. The data includes the manufacturing print in Japan along with all three services, manufacturing and composite readings in core Europe and the US. In terms of what to expect, the composite print in the Eurozone is expected to more or less hold steady at 54.0 (versus 54.1 in May which as a reminder was the lowest since November 2016). The manufacturing reading is expected to fall to 55.0 (which would be the lowest in 18 months) from 55.5 and the services print stay relatively unchanged at 53.7. For the US, the manufacturing and services readings are expected to hold steady at 56.3 and 56.8 respectively.

As for central banks, the BoE meets on Thursday although no change in policy is expected. The market will likely be most interested in the Bank's take on recent economic data however, although this is not a meeting which contains new BoE economic projections. Later on Thursday Governor Carney is also due to make his Mansion House speech.

In terms of other data to watch next week, its fairly quiet in the US with May housing starts and building permits on Tuesday, June Philly Fed business outlook and May leading index on Thursday the highlights.

In the UK May public finances data is out on Thursday while in Japan the May CPI report is out on Friday.

Fedpseak wise we're due to hear from departing NY Fed Chief Dudley on Monday when he speaks at a conference on reforming bank culture. His successor, Williams, will then deliver closing remarks at the same conference in the evening. The Fed's Bostic is also due to speak at a conference on Monday evening on the subject of the economic and monetary policy outlook. Over at the ECB, outside of Sintra, Villeroy is due to speak on Wednesday and Thursday along with Weidmann and Nowotny (also both Thursday).

Meanwhile the Oil market should get its turn in the spotlight next week when we have the meeting of OPEC ministers and partners in Vienna on Friday. The meeting is due to be used to discuss whether or not to restore the oil output that was halted last year and is scheduled to continue into Saturday although OPEC ministers and CEOs of major energy firms are also due to gather from Wednesday so there are the potential for headlines from then. Bloomberg expects the contentious meeting to result in the cartel lifting its production by 600k barrels a day.

With regards to other potentially important things to look out for next week, on Monday the Brexit withdrawal bill passes to the House of Lords, while German Chancellor Merkel is due to meet new Italy PM Conte in Berlin. Then on Tuesday Merkel is due to meet France President Macron with talks expected to focus on strengthening the Euro area. Elsewhere the Fed’s results from its 2018 bank stress tests will be out on Thursday while EU finance ministers are also due to gather in Luxembourg to meet to conclude Greece’s debt relief deal and a post bailout surveillance mechanism.

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Weekly preview of events by day, courtesy of Deutsche Bank

Monday: The most significant event on Monday is the start of the ECB's Forum on Central Banking in Sintra (continuing until Wednesday), with President Draghi due to make opening remarks in the evening. Away from that, the Fed's Dudley and Williams are all due to speak while datawise in the US the NAHB housing market index reading is due for June. In the UK house price data is due and in Japan May trade stats are due. Finally the Brexit withdrawal bill passes to the House of Lords on Monday and Germany Chancellor Merkel meets new Italy PM Conte.

Tuesday: The ECB Sintra conference will feature comments from President Draghi again, along with Board Member Praet and Governor Lane. The Fed's Bullard is also due to take part. Away from that the only data of note is the Euro area's current account balance reading for April and US housing starts and building permits for May. It's worth noting that Germany Chancellor Merkel will also meet France President Macron on Tuesday.

Wednesday: Concluding the ECB conference will be comments from Board Members Lautenschlager and Coeure, along with a policy panel featuring President Draghi, Fed Chair Powell and BoJ Governor Kuroda. Away from that BoJ meeting minutes will be out overnight, while Germany PPI for May, UK CBI selling prices data for June and May existing home sales in the US will be released. Away from that the OPEC International Seminar is due to begin in Vienna.

Thursday: The main focus on Thursday will be the BoE meeting at midday. Governor Carney will hold a press conference and then later in the evening is due to make his Mansion House speech. Data releases on Thursday include June confidence indicators in France, May public sector net borrowing data in the UK, June confidence indicators for the Euro area, along with weekly initial jobless claims, June Philly Fed business outlook, May leading index and April FHFA house price index readings in the US. The ECB's Villeroy de Galhau and Nowotny are also scheduled to speak along with the Bundesbank's Weidmann. Elsewhere the Fed's 2018 bank stress test results will be released, while Thursday also marks the deadline for Greece's debt relief deal.

Friday: The big data highlight on Friday is the release of the flash June PMIs around the world. In Japan the manufacturing reading will be released while in Europe and the US we'll receive the manufacturing, services and composite prints. Away from that the May CPI report in Japan will be released and the final Q1 GDP revisions will be made in France. The Oil market will also be in focus with the OPEC meeting in Vienna (continuing into Saturday).

* * *

Finally, here is a breakdown of just US events, along with consensus estimates, courtesy of Goldman:

The key economic release this week is the housing starts report on Tuesday. There are several scheduled speaking engagements from Fed officials this week. Federal Reserve Chairman Jerome Powell will be speaking on Wednesday.

Monday, June 18

  • 08:00 AM New York Fed President Dudley speaks: Outgoing New York Fed President William Dudley will give opening remarks at a conference on reforming bank culture.
  • 09:00 AM New York Fed President Dudley speaks: Outgoing New York Fed President William Dudley will participate in a panel discussion on “Finance, Culture, and Society.”
  • 10:00 AM NAHB housing market index, May (consensus +70, last +70)
  • 01:00 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will speak on the economic and monetary policy outlook and participate in a Q&A session for both the audience and press.
  • 01:00 PM New York Fed President Williams (FOMC voter) speaks: Incoming New York Fed President John Williams will give closing remarks at a conference on reforming bank culture.

Tuesday, June 19

  • 08:30 AM Housing starts, May (GS +2.5%, consensus +2.0%, last -3.7%); Building permits, May (consensus -1.0%, last -1.8%): We estimate housing starts rebounded 2.5% in May, retracing much of the 3.7% April decline. We expect a favorable swing in the weather to boost construction activity, and we believe single-family construction fundamentals remain solid.
  • 01:00 PM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will participate in a panel discussion on the “Macroeconomics of Price and Wage Setting” at the European Central Bank’s Forum on Central Banking in Portugal.

Wednesday, June 20

  • 08:30 AM Current account balance, Q1 (consensus -$129.0bn, last -$128.2bn)
  • 09:30 AM Fed Chairman Powell (FOMC voter) speaks: Federal Reserve Chair Jerome Powell will participate in a panel discussion on “Monetary Policy at a Time of Uncertainty and Tight Labor Markets” at the European Central Bank’s Forum on Central Banking in Portugal. There will be prepared text and audience Q&A.
  • 10:00 AM Existing home sales, May (GS flat, consensus +1.4%, last -2.5%): We look for unchanged existing homes sales in May based on softer regional housing data, following the 2.5% pullback in April. Existing home sales are an input into the brokers' commissions component of residential investment in the GDP report.

Thursday, June 21

  • 08:30 AM Initial jobless claims, week ended June 16 (GS 225k, consensus 220k, last 218k); Continuing jobless claims, week ended June 9 (consensus 1,712k, last 1,697k): We estimate initial jobless claims rose 7k to 225k in the week ending June 16. Claims look depressed in California and Florida, and we note that the timing of auto plant shutdowns could modestly boost claims in the upcoming report. Consensus expects continuing claims—the number of persons receiving benefits through standard programs—to rebound 15k to 1,721k.
  • 08:30 AM Philadelphia Fed manufacturing index, June (GS +32.0, consensus +29.0, last +34.4): We estimate that the Philly Fed manufacturing index declined by 2.4pt to 32.0 in June, following a sharp 11.2pt increase in May. Incoming manufacturing surveys so far indicate continued expansion in the business activity in June, so we expect a still-elevated reading this month.
  • 09:00 AM FHFA house price index, April (consensus +0.5%, last +0.1%)

Friday, June 22

  • 09:45 AM Markit Flash US manufacturing PMI, June preliminary (consensus 56.3, last 56.4)
  • 09:45 AM Markit Flash US services PMI, June preliminary (consensus 56.7, last 56.8)

Source: BofA, DB, Goldman


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