Macro Week Ahead - Greece and Spain still in focus

Greek and Spanish woes continue to weigh on sentiment. Stock markets  remain concerned about further political developments in the eurozone and steps taken to solve the ongoing debt crisis.
Investors’ key focus is still on when will Spain request financial support and whether a deal will be made in Greece. That said, market sentiment is likely to remain under pressure again this week as

Spain further debates whether to ask for aid and Greek leaders try to agree on labor reforms to qualify for another tranche of bailout. Busy official meetings agenda. Euro finance ministers will hold a  conference call on Greece on Wednesday, whereas IMF Managing Director Christine Lagarde will meet with French President Francois Hollande today and German Chancellor Angela Merkel tomorrow. Italian PM Mario Monti is set to meet with his Spanish counterpart Mariano Rajoy in Madrid today, with the discussion set to be centred on the bailout strategy.

Eurozone PMIs and US labor market data ey. This week key data to be released include final manufacturing PMIs for the eurozone on Friday and U.S. non-farm payrolls and unemployment rate data also due on Friday.  More earnings reports ahead. Among the most interesting earnings reports this week we will see big oil companies, Exxon and BP, banks, Barclays and Deutsche Bank, and carmakers, Ford and GM.

Hurricane shuts down US markets. Financial markets will also remain cautious at the start of the week waiting for hurricane Sandy to hit US northeast coast. Due to the hurricane the US stock markets will be closed starting today and there is a chance these markets will remain closed through Tuesday.

Polish October PMI to support MPC doves. In Poland the key focus will be the October PMI scheduled for release on Wednesday. The weak PMI reading should support our expectations for a 25bp interest rate cut at the MPC meeting next week.
 
Hungary’s and Czech central banks to announce interest rate decisions. Consensus expects Hungary’s central bank to cut rates further on Tuesday to support the recession-hit economy, by 25bp to 6.25%. The Czech Central Bank on Thursday is expected to keep rates unchanged at 0.25%.