Weekly outlook for August 1-5

The talks over raising the US debt ceiling have ended yesterday with a raise of $2.1 trillion. Now that this issue was resolved, the aftermath will start including whether rating agencies will downgrade the US credit rating. This week there are many news items ahead including ECB rate decision, U.S. and Canada employment reports that could affect not only the US dollar, but also other major currencies and major commodities;  will continue to stir up the financial markets and raise its uncertainty. Here is an economic news calendar for the week of August 1st to August 5th that highlights the main news items and reports related to U.S, Europe, Australia, Japan, China and Canada.   

(all times GMT):

  1. Sunday 31st of July 2.00– China Manufacturing PMI: this index will cover 800 companies in 20 industries in China; the early speculations suggest that this manufacturing PMI will show a decrease in July compared with previous months’ index. This is an indication that the Chinese manufacturing output may have dropped for the first time in 2011;
  2. Monday 1st of August 15.00 – U.S. ISM Manufacturing PMI: This report will refer to July 2011, and will indicate the monthly change in manufacturing sector on a national level. During June the index rose to 55.3% an increase of 1.8 percent points compared to the previous month’s index; there was a rise in major commodities prices such as Aluminum; on the other hand, there was a supply shortage in certain commodities such as rubber products (see here my review of last report);
  3. Tuesday 2nd of August 2:30 – Australian trade of Balance: The upcoming report will regard June 2011. In the recent report regarding May 2011, the seasonally adjusted balance of goods and services inclined from a surplus of $1,617 million April 2011 to $2,333 million in May 2011 – a $716 million hike. There was a rise in export of non-monetary gold by 536 million; if this incline in gold export will continue, it might suggest an increase in demand for non-monetary gold that could explain part of the recent rise in gold prices (see here last report);
  4. Tuesday 2nd of August 5:30 – Reserve Bank of Australia – rate decisions statement: the overnight money market interest rate of Australia’s Reserve Bank remained at 4.75% since November 2010. Australia’s inflation rate remains near the Bank’s target inflation, and the labor force remained robust with unemployment rate near 5%; this statement will present the Bank’s analysis for the keeping the rate unchanged (see here previous report);
  5. Wednesday 3rd of August 15.00 – U.S. ISM Non-Manufacturing PMI: This report will show the changes of non-manufacturing sector during July 2011. During June this index continued to show growth of 53.3%, but it was a lower rate than in May that reached back then 54.6% (see here last report).
  6. Wednesday 3rd of August 15:30 – EIA report about Crude oil inventories: The EIA (Energy Information Administration) will publish its weekly report on the U.S Petroleum report; last week the US oil stocks sharply inclined by 9.16 million barrels; this is the largest injection since April 30th, 2010. For the week ending on July 22nd crude oil stocks reached 1,809 million barrels (see here the recent crude oil market review);
  7. Thursday 4th of August 13:30 – ECB conference Trichet speaks and Euro rate decision:  last month ECB raised the interest rate to 1.5%, an increase of 0.25 percent points. Since the recent Euro Area inflation rate reached in July 2.5% (annual terms), a small decrease from the June’s inflation rate of 2.7%. Jean Claude Trichet, President of the European Central Bank, said the bank will continue to monitor the price developments in the Europe and will act accordingly; it’s likely that the ECB will raise again the rate by the end of 2011 at least one more time, but if I would to speculate I don’t think it will be this time; the rate decision could have an effect on the Euros to US dollar exchange rate, along with gold prices;
  8. Thursday 4th of August 13:30 – Department of Labor report – U.S. unemployment claims: For the week ending on July 23rd, initial claims decreased by 24,000, as it reached 398,000 claims; the insured unemployment rate declined by 0.1 percent points to 2.9% for the week ending on July 16th; and the number of insured unemployment was 3.703 million, a decrease of 17,000 compared with the previous week’s. (see here my recent review on the US Labor market);
  9. Thursday 4th of August 15:30 – EIA report about Natural gas storage: the natural gas started to cool down; the EIA will publish its U.S. natural gas stocks, production and consumption report for the week ending on July 22nd. In the recent report, natural gas storage by 1.6% to 2,714 billion cubic feet for all lower 48 states; the natural gas storage is still 6.9% below the storage level during the same week in 2010 (see here my recent natural gas storage review);
  10. Thursday 4th of August tentative – Bank of Japan – rate decision and monetary policy statement: This statement will present Bank of Japan’s rate decision and other monetary related decisions. In the last statement the bank kept the interest rate at 0 to 0.1 percent. BOJ is likely to keep the rate at its current level and cut off the economic outlook for 2011. This statement could offer some insight to the economic progress of Japan following the recent tsunami turmoil back in March. Japan is among the leading countries in importing commodities such as gold, crude oil and natural gas;
  11. Friday 5th of August 12:00 – Canada unemployment rate and employment report: In the previous employment report regarding June 2011, employment increased by 28,000, for the third straight month. Most of the increase in employment was attributed to due to rise in part time work. The unemployment rate remained unchanged at 7.4%. If this report will continue show an additional improvement in the labor report in Canada in July, this might further strengthen the Canadian dollar and consequently might also affect the prices of major commodities that Canada export such as crude oil and natural gas prices (see here previous report);
  12. Friday 5th of August 13.30 – Canada building permits: during May the total value of the building permits inclined by 20.9% to $6.4 billion compared to April, in which the building permits inclined declined by 21.5%. This measure fluctuates very sharply from month to month. If this measurement will continue to rise in the upcoming report regarding June, this may further strengthen the Canadian dollar (see here previous report).
  13. Friday 5th of August 13.30 – U.S. unemployment rate report & non-farm employment change: in the recent report there was a very small increase in the number of non-farm payroll employment increased by only 18 thousand people, and the US unemployment rate inclined to 9.2% a minor rise of 0.1 percent point compared with May’s rate; there are speculations that the upcoming report regarding July 2011 won’t show much improvement than the previous month (see my last review on the US employment report).


For further reading:

Previous Reports: