Weekly Outlook of Financial Markets for July 29 – August 2

Major energy commodities including oil, and natural gas fell during last week while precious metals rallied. Equities markets slightly pulled back, while in the forex markets the US dollar depreciated against leading currencies including Euro and Japanese yen. In the upcoming week several reports, speeches and events will unfold and could affect commodities, equities and forex markets; these include: FOMC meeting, ECB rate decision monetary policy meeting, Stevens’ speech, U.S non-farm employment report, China and U.S manufacturing PMI,  Canada’s GDP, U.S’s GDP second quarter estimate, Spain’s employment situation, Bank of Japan’s Kuroda Speaks, BOE rate decision, U.S pending home sales, German industrial production, and U.S. jobless claims. Here is an economic outlook for the week of July 29th to August 2nd regarding the U.S, China, Euro Area, Japan, Australia, Canada, and Great Britain.   

(All times GMT):

Monday, July 29th

15:00 – U.S. Pending Home Sales: This report presents the changes in pending home sales in the U.S. for June; in the latest report, the pending home sales index sharply increased by 6.7% (M-over-M). These data are another signal for the developments in U.S’s housing market; if the housing data will show ongoing increase in sales it may pressure up the U.S dollar;

Tentative – Bank of Japan’s Kuroda Speaks: This time, Bank of Japan Governor will talk at Research Institute of Japan, in Tokyo. Considering the sharp movement of Japan’s currency and the recent political developments in Japan, his words could influence traders;

Tuesday, July 30th

04:45 –Governor Stevens speaks: Reserve Bank of Australia Governor will give a speech at the Anika Foundation Luncheon supported by the Australian Business Economists and Macquarie Bank, in Sydney; in his upcoming talk, the Governor may refer to the recent RBA monetary policy meeting, in which the RBA left its interest rate flat; this speech may affect the Australian dollar;

09:00 – Gfk German Consumer Climate Survey: This survey estimates Germany’s consumers’ economic climate including past and future economic conditions (on a monthly basis) for July. In the recent report for June 2013, the climate index slightly increased to 6.8;

15:00 – U.S Consumer Confidence: Based on the latest monthly update, for May, the consumer confidence index rose to 81.4 (month-over-month). The current expectations are that the June index may further rally; this report might affect commodities prices including the oil and natural gas;

Wednesday, July 31st

07:00 – German Retail Sales: This monthly update will show the developments in German retail sales during June. In May 2013, retail sales bounced back by 0.8% – higher than many had expected; if this report will show another rise in sales then it might further strengthen the Euro;

08:00 – KOF Economic Barometer: this monthly report measures the estimate to the Swiss economy in the coming months;

10:00 – EU CPI Flash Estimate: This estimate will provide the annual consumer price index of the Euro members. Based on the previous estimate for June, the annual CPI of 1.4%, which is still much lower than the ECB’s target inflation of 2%. If the inflation will further dwindle, it could indicate the EU economy continues to slowdown. This turn of events may enable the ECB to lower again its interest rate; this news could affect the direction of the Euro/USD currency pair;

10:00 – EU Unemployment Rate: This is another report that estimates the progress of the EU economy from the labor point of view. Last month’s report showed that the rate of unemployment inched down to 12.1%, which is still a high rate. If this downward trend will persist, it could positively affect the Euro;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the next U.S non-farm payroll developments for July 2013 that will be published on Friday;

13:30 – Canada’s GDP by Industry: this monthly update shows the changes in major industrial sectors for May 2013. In the latest report regarding April 2013, the real gross domestic product edged up by 0.1%. This report may affect the Canadian dollar, which is strongly correlated with major commodities prices;

13:30 – First U.S GDP 2Q 2013 Estimate: This will be the first estimate of U.S’s second quarter 2013 real GDP growth. In the latest estimate the U.S GDP rose by 1.8% in the first quarter of 2013 (it was revised down). If the growth rate from first quarter of 2013 to the second quarter will further rise, this could affect not only the US dollar but also commodities prices;

19:00 – FOMC Meeting and Press Conference: The FOMC will convene for the fifth time this year and come out with a statement, which will be followed by a press conference of any changes to its monetary policy. In the latest meeting the FOMC left its policy unchanged. But in the press conference that followed, Bernanke hinted that the Fed may scale back on its current asst purchase program in the coming months. Later on, however, Bernanke took a step back in his testimony and suggested the FOMC will keep its expanding Monterey policy. This left its unclear when the Fed will scale down its asset purchase program. Perhaps in this upcoming meeting the FOMC member will make it clearer. The direction of the upcoming press conference could stir up the markets again;

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on July 26th; if the oil stockpiles will change significantly, it could affect the direction of crude oil price in the U.S; 

Thursday, August 1st

02:00 – China Manufacturing PMI: Back in June 2013 the Manufacturing PMI slipped to 50.1 – i.e. China’s manufacturing sectors is still expanding but at a slightly slower pace; the recent flash PMI report was well below the 50 point market. If in the upcoming report the PMI will also fall below the 50 point mark, it could signal a decline in China’s economic progress. If the index will decrease, this may also adversely affect leading commodities prices;

08:45 – Italian and Spanish Manufacturing PMI: These reports will pertain to July 2013. During June, the Italy’s index rose to 49.1; Spain’s PMI rose to 50. This means the manufacturing sectors in these countries are slowly improving; these indexes may affect the Euro;

09:30 – GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector in July 2013. In the previous update regarding June 2013 the index increased again to 52.5. This rate gain means the manufacturing sector is growing at a faster pace; this index might affect GB Pound;

12:00 –BOE Rate Decision & Asset Purchase Plan: Bank of England will come out with its basic rate for August 2013; the MPC will also state of any new changes to its asset purchase pogrom; as of July, BOE kept its rate flat at 0.5% and the asset purchase plan s at £375 billion;

12:45 – ECB Rate Decision: ECB will announce its cash rate for August. Following the last meeting in which the ECB kept its rate at 0.50%, Draghi’s decision could stir up the Euro market. Some suspect he may keep ECB’s monetary policy with no changes. The recent shift in Draghi’s sentiment with his positive remarks regarding his projections for the future development of the EU economy could further pull up the Euro against leading currencies. Nevertheless, if ECB will cut its cash rate, or lower further its deposit rate, the Euro is likely to change direction and fall;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will pertain to the changes in the initial jobless claims for the week ending on July 26th; in the previous report the jobless claims increased by 7k to reach 336k; this upcoming weekly report may affect the U.S dollar and consequently commodities and stocks markets;

15:00 – U.S. Manufacturing PMI: This report will refer to July 2013. In June, the index bounced back to 50.9%; this means the manufacturing is growing; this index may affect foreign exchange rates, crude oil and natural gas markets.

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update regarding U.S. natural gas market will pertain to the latest changes in natural gas production, storage, consumption and rates as of July 26th; in previous weekly report, natural gas storage increased by 41 Bcf to 2,786 Bcf;

Friday, August 2nd

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain dropped in June by 127.2k. This mean, the employment situation in Spain has improved. If in the upcoming report the number of unemployed will drop again, this may pull up the Euro;

15:00 – Australia’s PPI: This quarterly update will pertain to second quarter of 2013. During the first quarter of 2013, the producer price index rose by 1.6% compared to the first quarter of 2012 and by 0.3% compared to Q4 2012; this index may affect the Aussie dollar.

09:30 – GB Construction PMI: Great Britain’s construction sector in June 2013 slightly improved as the PMI rose to 51 – the construction sector is growing at a slightly faster pace. The upcoming report will refer to July and might affect GB Pound;

13:30 – U.S. Non-Farm Payroll Report: in the latest employment report for June 2013, the labor market sharply rose again: the number of non-farm payroll employment rose by 195k; the U.S unemployment rate remained flat at 7.6%; if in the upcoming report the employment will grow again by over 150 thousand (in additional jobs), this may pressure down the prices of gold and silver and pull up the US dollar;

15:00 – U.S Factory Orders: This report will refer the developments in U.S. factory orders of manufactured durable goods during July; in the previous report factory orders rose by 2.1%; this report will offer some insight regarding the progress of the U.S economy;

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