The week ahead
21/02/2012
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Greek discussions continue, with compromises to be made
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US housing data should indicate the market sentiment
The Greece situation is the key issue that will determine the tone for the week ahead. If all goes to plan in the early meetings, then Greece could provide a formal bond offer to creditors by Wednesday, with the exchanges completed by the bond maturities on 20 March. This requires European leaders to agree the latest austerity proposals from Greece, private creditors to accept the offer without legal consequences, and the International Monetary Fund to agree a proposal that is highly likely not to reduce the debt ratio to 120% of GDP by 2020. At least it is a step in the right direction.
In the US, the country from which the rest of the world takes its lead, the economic releases focus on housing, with existing home sales expected to show a fourth successive monthly rise and new home sales expected to show an upward move for the first time in over a year. In the UK, the second estimate of the Quarter 4 GDP data is released on Friday, but it is unlikely to be revised significantly either way. Meanwhile, the minutes from the most recent meeting of the Monetary Policy Committee will be important to gauge the appetite for further quantitative easing beyond the £325 billion already pumped into the UK economy.
