TAKE A LOOK-Five world markets themes in the coming week

Friday, 25 Oct 2013 | 12:35 PM ET

LONDON, Oct 25 (Reuters) - Following are five big themes likely to dominate thinking of investors and traders in the coming week, scheduled events, and the Reuters stories related to them.


The main event for financial markets in the coming week is likely to be the Federal Reserve's latest policy meeting and any clues that might emerge about when the Fed will begin to scale back its bond-buying stimulus. Taking account of recent sub-par data, the expected impact of the recent U.S. government shutdown and the possibility of another budget spat in early 2014, it could well come beyond the first quarter. This could keep stocks, bonds and other assets buoyant, though traders will keep a weather eye on rising Chinese money market rates. And the lack of volatility may not be welcome on banks' trading desks.

* Central banks drive asset rally but how much further?

* U.S. Federal Reserve policy decision on Oct. 30

* Bank of Japan/New Zealand/Egypt central bank decisions Oct. 31

* India central bank monetary policy review/Hungary rate decision Oct. 27


A side effect of the flood of central bank cash in recent months has been to crush the volatility on which banks' trading desks depend and some have howled with pain. More big lenders, including Barclays, Deutsche and UBS report results in the coming week, keeping the focus on the sector that will remain in the spotlight now the ECB has unveiled the terms of its AQR health checks. As for European earnings more broadly, some 57 percent of companies to have reported so far have met or beaten forecasts, just slightly more than among U.S. firms.

* Bankia reports on Oct. 28, Deutsche, Lloyds , Standard Chartered, UBS on Oct. 29, Barclays on Oct. 30 and Danske on Oct. 31

* Credit Suisse underwhelms with plan to shrink interest rate trading

* ECB sets out tougher bank health tests, shares drop

* Western European/U.S. earnings calendar


While the flood of central bank cash may have crushed the volatility in markets on which banks' trading desks depend, it has not prevented big steady changes in foreign exchange rates that have caused havoc for companies. Many European firms to have reported results so far have blamed the stronger euro or recent steep falls in emerging market currencies for underperformance. So far, to some in the markets surprise, the ECB has appeared unconcerned about the euro's exchange rate, though speculation is growing the bank may be planning another round of long-term loans, one effect of which could be to tamp down the currency.

* Money markets see new cheap loans from European Central Bank in 2014

* Asmussen says ECB has no target for euro

* Schneider slashes 2013 revenue outlook, blames euro exchange rate


The bullish dollar trade is unravelling in the final quarter of the year, but volumes are low and implied volatilities are anchored. The Fed meeting could lay the ground for further losses in the dollar, although renewed worries about tightening in China and concerns about its banking system could see investors stay away from growth-linked and emerging market currencies. The dollar's weakness has pushed the euro to a two-year high on a trade-weighted basis which will draw euro zone policymakers and ECB board members to express concern about the adverse effect of a rising currency. That could see the euro stay away from the psychological $1.40 mark.

* BREAKINGVIEWS-Weak dollar stress-tests the ECB's toolkit

* Buoyant sterling seen drifting after dash to price in rate hikes

* Loan contraction highlights fragile euro zone recovery


U.S. Treasuries have rolled back some of their underperformance against German bonds as the prospect of prolonged Federal Reserve stimulus lures investors back into the world's most liquid debt. The 10-year U.S. T-note yield premium over Bunds is near its lowest since June but the contraction seems to have run out of steam ahead of the Fed's policy meeting next week. Weaker euro zone economic data has also lifted demand for German Bunds ensuring the spread tightening is not a one-way bet. As for the euro zone's periphery, renewed concerns about growth have braked their outperformance of Bunds though the trend for tighter yield spreads remains supported by the prospects of extended stimulus.

* Ireland's bailout report: Good, now fix public debt

* Planned Portugal debt swap may be too costly for lasting relief

* Euro zone suffers from integration fatigue

* Euro zone government bond auction outlook

(Compiled by Nigel Stephenson; Editing by Susan Fenton)

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