There will be a push by the U.S. Congress and Senate to get final reading on the Financial Regulation Reform this week. Policy makers hope to present the bill to President Obama for his signature by July 4th. More legislative work needs to be done, especially in the area of limits to risk taking by global financial institutions but the political motive to get this bill passed swiftly may affect markets this week.
Research in Motion reports its Q1 earnings this week amidst rumours the tech company is looking to launch a tablet device designed to compete with the intensely popular IPad from Apple. Q1 EPS for RIM should be bolstered by a big push from international sales. The big question mark is will those global sales be enough to offset clearly slowing U.S. sales for the smart phone company? Expect details of the new Blackberry 6.0 operating system and soon to be released handsets to factor into guidance for the balance of the year.
The heavily controversial G8 and G20 summits are being held in Ontario this week. Global leaders are congregating with the grand goal of putting the global economy on a more solid footing. Ahead of this week’s meetings, China extended its olive branch to the United States by announcing they will remove their currency peg to the U.S. dollar. The peg is widely viewed as one of the great imbalances in the global economy. It has allowed China to grow its exports of manufactured goods and kept U.S. consumers borrowing due to ultra low interest rates and low inflation. China’s announcement was more political than economic ahead of the G20 meetings, but it will likely give a boost to the base metals and energy markets.
Speaking of the G20, most of the Toronto business community has made alternative work arrangements (read “holidays”) likely making the back half of this week slower than normal. How the world’s leaders expect to improve the global economy by getting together for a long weekend at the ‘fake lake’ is lost on this scribe. I suspect it is more likely the continuous drone of blaring vuvuzelas heard on every television within the security zone will distract the world’s leaders much the same way it is affecting their nations’ soccer players. Happy G20 everyone!
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