After a tumultuous week, the focus will be on whether U.S. data will justify Fed tapering and whether China’s policymakers will remain steadfast in reducing financial risks.

While May’s durable goods orders data are likely to show that the weak global economy is continuing to weigh on producers, May’s data on new home sales and personal income and spending will show that households are faring better, according to Paul Dales, an economist at Capital Economics.

In Europe, this week’s data releases are likely to provide further evidence that economic prospects are improving in the euro zone. Economists are looking for increases in both the euro zone EC Economic Sentiment Indicator (ESI) and the German Ifo. However, the region’s gross domestic product is still expected to fall for a seventh consecutive quarter in the second quarter.

Meanwhile, on Thursday, E.U. leaders will begin a two-day meeting. One of the key topics for discussion will be banking unions as policymakers seek to reassure the markets that steps are being taken to break the link between sovereigns and their banking systems, according to Ben May, Capital Economics European economist.

Last week, euro zone finance ministers agreed that the ESM bail-out fund would be able to inject up to 60 billion euros directly into the region’s struggling banks. But the new facility will not become operational for at least another year and national governments may still have to shoulder a large share of the financial burden if their troubled banks need to be recapitalized.

For Japan, the usual end-month data rush comes on Friday, including May figures for retail sales and overall household spending, unemployment, industrial production, housing starts and the CPI, as well as the timelier manufacturing PMI for June. The small business confidence survey for June is also due this week, and the markets will be looking ahead to the release of the second quarter Tankan on the following Monday.

“Overall, we expect the business surveys to show a further gradual improvement in economic conditions, despite the volatility in financial markets,” said Julian Jessop, chief global economist at Capital Economics, in a note to clients.

The May national CPI could also show core prices no longer falling year-on-year, and perhaps even rising, which could generate some positive headlines about the “end of deflation.”

Elsewhere, Vietnam is due to release GDP figures for the first quarter of 2013. Growth over the past year has been held back by a crisis in the banking system, and a meaningful recovery in the economy is unlikely until the banking sector is fixed.


8:30 a.m. – Chicago Fed National Activity Index for May.

10:30 a.m. – Dallas Fed Manufacturing Index for June.

1 p.m. -- Federal Reserve Bank of Dallas President Richard Fisher (FOMC non-voter) speaks on "U.S. Monetary Policy and the U.S. Economy" before the Official Monetary and Financial Institutions Golden Series Lecture event in London.


Portugal -- Troika technical team visits Portugal.

Germany -- IFO business climate index, current assessment index and business expectations index for June.


8:30 a.m. – The volatility in commercial aircraft orders will play a big part in the durable goods orders figures for June. Boeing reported orders for 232 aircraft in May, up from 51 the month before. Aside from the transportation, however, core orders were weak. After a 1.5 percent month-on-month gain in April, economists have penciled in a decline of 0.1 percent in May. Nevertheless, the surge in aircraft orders means that headline orders probably still increased by 3 percent.

9 a.m. – Economists expect the S&P Case-Shiller Home Price Index to rise 1.4 percent month-on-month in April, similar to increases observed in recent months, leaving the index up 10.8 percent year-over-year. The 20-city index has posted increases in every month since February 2012 ­– a trend that is expected to continue.

9 a.m. – The FHFA Home Price Index likely will rise 1.1 percent in April, consistent with the improvement seen in other home price indices during the same time period. This would translate into a year-over-year increase of 7.6 percent.

10 a.m. -- Federal Reserve Division of Banking Supervision and Regulation Director Todd Vermilyea testifies on "Private Student Loans" before the Senate Banking Committee in Washington.

10 a.m. – Mirroring the closely-related University of Michigan consumer sentiment indicator, Conference Board consumer confidence should moderate to 75.5 in May from 76.2 in the prior month.

10 a.m. – New home sales probably rose by 2 percent month-on-month in May to 463,000 units. This would leave months’ supply at 4 months, similar to last month, and keep inventory levels near post-crisis lows.

10 a.m. – Richmond Fed Manufacturing Index for June.

10:30 a.m. – Dallas Fed Service Activity Index for June.


E17 -- European Central Bank Executive Board member Benoit Coeure speaks at Euromoney Global Borrowers and Investors Forum in London.

E17 -- European Central Bank President Mario Draghi speaks on “A Strong Europe – A Bright Future for Germany” in Berlin.

Netherlands – Q1 GDP, final reading.


7 a.m. -- The Mortgage Bankers Association's (MBA) Mortgage Index for the week ending June 21.

8:30 a.m. – The third estimate of Q1 GDP will likely remain unchanged at 2.4 percent.

1:55 p.m. -- Federal Reserve Bank of Minneapolis President Narayana Kocherlakota (FOMC non-voter) speaks on "Appropriate Monetary Policy" before the Society for Economic Dynamics pre-conference in Seoul, South Korea.


E17 -- European Central Bank Executive Board Member Joerg Asmussen speaks at 2013 IIF Spring Meeting in Paris.

E17 -- European Central Bank Executive Board member Yves Mersch speaks at IIF Spring Meeting in Paris.

France – Q1 GDP, final reading.

Germany – GfK consumer confidence index for July.


8:30 a.m. – Economists expect a 0.2 percent month-on-month increase in personal income in May and a 0.3 percent increase in personal spending.

8:30 a.m. – For the week ending June 22, initial jobless claims should descend to 346,000 from 354,000 in the prior week.

8:30 a.m. – Chicago Midwest Manufacturing Index for May.

10 a.m. – Pending home sales should have increased 0.9 percent month-on-month in May, after advancing 0.3 percent in April.

10:30 a.m. -- Federal Reserve Bank of New York President William Dudley (FOMC voter) gives remarks on the national and regional economy before a briefing on labor market conditions for recent college graduates in New York.

10:30 a.m. -- Federal Reserve Board Governor Jerome Powell (FOMC voter) speaks on "Non-Conventional Monetary Policy" before the Bipartisan Policy Center in New York.

11 a.m. – Kansas City Fed Manufacturing Composite Index for June.

12:30 p.m. -- Federal Reserve Bank of Atlanta President Dennis Lockhart (FOMC non-voter) speaks on the economic outlook before the Kiwanis Club of Marietta in Georgia.


E27 – EU Summit in Brussels (to June 28).

Portugal – Labor Group UGT, CGTP and State Workers hold general strike.

E17 – ECB Executive Board Member Mersch speaks at University of the German Federal Bank in Hachenburg.

Japan -- Index of all-industry activity for April.

Germany – Unemployment change for June.

U.K. – Q1 GDP, final reading.

E17 – Consumer confidence index for June, final reading.

Japan – Nationwide CPI for May.

Japan – Industrial production for May.


8 a.m. -- Federal Reserve Board Governor Jeremy Stein (FOMC voter) speaks on "Monetary Policy" before the C. Peter McColough Series on International Economics event in New York.

9:15 a.m. -- Federal Reserve Bank of Richmond President Jeffrey Lacker (FOMC non-voter) speaks on the economic outlook before panel, "The Economic Outlook and the Effect on Your Law Practice: A Forecast and Some Professional Advice," at the Judicial Conference of the Fourth Circuit in West Virginia.

9:45 a.m. – Last month, the Chicago PMI jumped to 58.7 from 49.0. May’s level market the highest level of the index since March 2012. In June, economists expect the index to moderate to 56.0. Looking ahead, the Chicago PMI is likely to continue to outperform other regional PMIs and the national ISM index given the Chicago PMI’s higher exposure to U.S. auto sector. “The ongoing recovery of the auto sector from the brink of collapse during the financial crisis is a strong tailwind for the sector,” Bank of America Merrill Lynch's Ethan Harris said in a note.

9:55 a.m. – Economists look for an unchanged print of 82.7 in the University of Michigan’s June consumer sentiment survey.

12 p.m. -- Federal Reserve Bank of Cleveland President Sandra Pianalto (FOMC non-voter) speaks on "Labor Market Trends and Implications for Monetary Policy and Local Workforce Development" before the West Liberty University Economics Club/Wheeling Area Chamber of Commerce Luncheon in West Virginia.

3:30 p.m. -- Federal Reserve Bank of San Francisco President John Williams (FOMC non-voter) speaks on the economy and monetary policy before the Sonoma County Economic Conference in California.


Thailand – Manufacturing production for May.


Sources: Central banks, European Commission, Reuters, Market News, Capital Economics, Barclays, Bank of America Merrill Lynch, Nomura Securities.