1. Greece says 'No' and sails off to the unknown
In an historic referendum held on Sunday, Greece surprised pundits with a decisive 'No'to the latest bailout terms offered by foreign creditors. This could mark the beginning of the end of Greece's membership in the euro and more turmoil and desperation for the Greeks. For the rest of the world, it could greatly increase the degree of uncertainty and volatility in markets, send the euro plunging, and investors flying to the safety of the US dollar, bonds and gold. Everyone has to hold on until the future of Greece and the eurozone becomes clearer.
2. Make-or-break for China stocks
Amid the Greek storm, China's stock markets face a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that would threaten the world's second-largest economy, as Reuters put it. The government is anxiously awaiting the market opening on Monday to see if the new measures will halt a 30 per cent plunge in the last three weeks, or if panicky retail investors who borrowed heavily to speculate on stocks will continue to sell.
Over the weekend, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company. China has also orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans.
Investors polled on Sunday believe China stock indexes will jump more than 5 per cent on Monday, but this scenario could be upended by the Greek 'No' vote. In any case, a bounce could be short-lived. The amount of money that brokerages and fund managers have pledged to put into the stock market is at least 120 billion yuan (S$26 billion) - tiny compared with the size of leveraged positions still waiting to be unwound. Some analysts suggest total margin lending, both formal and informal, could add up to around 4 trillion yuan.
3. US Fed chief Yellen speaks
US Federal Reserve chair Janet Yellen will speak on the US economic outlook on Friday. Any clear indication about the timing of the beginning of the tightening cycle will affect US and global markets. More clues will also come earlier in the week when the US Federal Open Market Committee releases the minutes of its June policy meeting on Thursday, Singapore time.
4. Central bank watch
This week, central bankers in Australia and South Korea will meet for their monthly meetings and analysts are expecting no major change in monetary policies.
5. US earnings season begins
Alcoa Inc set to kick off earnings season this week, with investors are eyeing a 3 per cent projected drop in benchmark S&P 500 earnings from a year ago, which would be the first profit decline since the third quarter of 2009, according to Thomson Reuters data.
