Daily Agenda: The Week Ahead, July 5 – 10, 2015
Greece votes on creditors’ terms; open outcry trading comes to an end in Chicago; quarterly earnings season gets underway.
In Chicago an era comes to an end this coming week, as futures pits fall silent after over a century of open outcry trading on the Chicago Board of Trade. Another marker in financial history may also come to pass: should Greece vote against a referendum on whether to accept the terms of the country’s creditors, it would signal the first departure from the euro since the currency’s inception in 1999. The kickoff of earnings season will likely take investors focus away from macro risk factors to a degree, though critical announcements by central banks around the globe will remind that monetary policy remains a critical catalysts for financial markets.
Sunday, July 5: Greek Finance Minister Yanis Varoufakis has pledged to resign if his fellow citizens do not endorse a rejection of the terms offered by creditors during the referendum vote on Sunday. Both Varoufakis and Prime Minister Alexis Tsipras are actively campaigning for a rejection that might ultimately lead to an exit from the common currency. Polls indicate a race that is too close to call.
Monday, July 6: The Chicago Board of Trade, part of the CME Group and the world’s oldest operating options and futures exchange, will officially end open outcry trading of all futures contracts except for the S&P 500. The pit trading for which the exchange is largely known has been largely displaced by electronic trading. The decision to close open outcry futures trading was originally announced in February after floor volumes had fallen to just 1 percent of the company’s total futures volume.
Tuesday, July 7: Currency markets will be keeping a close eye on the monthly rate decision by the Reserve Bank of Australia. Bank governor Glenn Stevens has in the past indicated that the Australian dollar was roughly in line with his preferred level versus the currencies of primary trading partners. During a July 2 speech in London, he stressed that Australian exposure to any euro zone turmoil would likely be minimal.
Wednesday, July 8: Alcoa, the largest U.S. producer of aluminum, reports quarterly earnings after equity markets close in New York. Traditionally, the announcement by the global light metals giant marks the start of earnings season as well as serves as a barometer for global industrial demand. The company’s stock has declined by more than 20 percent since April as analysts cut forecasts due to the impact of a strong U.S. dollar.
Thursday, July 9: Authorities in Beijing have been struggling to find a balance in credit flows that might tame the recent massive volatility in Chinese equity markets. Yet overall, demand signals have remained depressed. Consensus forecasts for National Bureau of Statistics June consumer price index levels point to sustained weakness. This should provide policymakers with plenty of room to navigate further liquidity measures.
Friday, July 10: Minions, the latest installment in the 3-D computer-animated film franchise Despicable Me, will be released in theaters. Former Disney and Fox executive Chris Meledandri’s production company Illumination Entertainment has seen the first two releases of the series gross in excess of $1.4 billion globally. The modest-budget drama Boulevard will be released the same day, featuring actor Robin Williams’ final feature performance completed before his August 2014 death.