Eyes turn to potential Greece default ahead of key repayment date
WEEKLY MARKET COMMENTARY |
How the drama surrounding a possible Greece default plays out during the next six weeks will likely drive price action across most of the international economy. Investors looking for a possible default date should focus on July 19-20 when the country is scheduled to repay €3.5 billion to the European Central Bank. Should it become evident that Greece intends to default, investors should anticipate a rough two months in global equity markets, a safe-haven move in international capital flows to the U.S. and renewed appreciation of the dollar.
Beyond the brinksmanship playing out in Europe, fundamental economic data in the U.S. continues to improve and this week should be no different. In a light week of economic publications the focus will be on the Wednesday release of the May advance retail sales report. An array of labor market data, wholesale pricing and consumer sentiment will round out the week. In addition the U.S. Treasury will float $24 billion in three-year notes on Tuesday, $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday.