Financial Market Forecast for January 20-24

The prices of leading commodities didn’t move much in the past week. On the other hand, the US dollar sharply appreciated against leading currencies such as Euro, Japanese yen and Aussie dollar during last week. During the upcoming week several reports, decisions and events will come to fruition including: German PPI, China’s GDP report, German Ifo business climate, U.S existing home sales, Japan’s rate decision, U.S manufacturing PMI, BOC monetary policy report and rate decision, GB climate count, MPC rate vote, China, Germany and France’s manufacturing PMI reports, Canada’s retail sales, Australia’s CPI, and U.S. jobless claims.  Here is an economic outlook for the week of January 20th to January 24th regarding the U.S, Euro Area, GB, Canada, China, Japan, Australia and Great Britain.   

(All times GMT):

Monday, January 20th

03:00 –China Fourth Quarter GDP 2013: In the third quarter of 2013, China grew by 7.8% in annual terms; China’s economy grew by 7.5% in the second quarter of 2013. The current expectations are that the fourth quarter of 2013 grew in annul terms by a similar rate to the previous quarter; if the growth rate further rises, this may positively affect commodities prices;

05:30 – China’s Industrial Production: Based on the recent monthly report, China industrial production slightly fell to an annual rate of 10%; if the growth rate rises again, it may suggest China’s economy is progressing faster;

07:00 – German PPI: In the previous update, the German PPI slipped by 0.1%; the progress if Germany’s inflationary pressures could affect ECB’s monetary policy including the monthly rate decision;

Tuesday, January 21st

10:00 – German ZEW economic sentiment: The forthcoming report will pertain to the ZEW indicator of economic sentiment for Germany for December. In November, the ZEW indicator for Germany rose to 62 points; if Germany’s economic sentiment continues to rally, the Euro could plausibly strengthen against other currencies including the US dollar;

13:30 – Canada Manufacturing Sales (November 2013): In the previous report regarding November 2013, manufacturing sales rose by 1%;

00:30 – Australia’s CPI for Q4 2013: This quarterly report will refer to the developments in the consumer price index. In the last report regarding the third quarter of 2013, the CPI rose to 1.2% compared to the second quarter and reached a growth rate of 2.2% compared to Q3 2012; this report could affect the Aussie dollar which is correlated with commodities prices;

Tentative –IEA Monthly Oil Update: This report will present a revised (as of November) outlook and analysis for the global crude oil and natural gas market for 2013 and 2014;

Wednesday, January 22nd

Tentative – Japan’s rate decision and press conference: In the upcoming Japanese monetary policy meeting, BOJ members will announce of any changes to the bank’s current asset purchase program. This decision may affect the Japanese yen;

09:30 – Great Britain Claimant Count Change: As of last month, the number of unemployed in GB fell again by 36.7k; the rate of unemployment edged down to 7.4%;

09:30 –MPC Asset Purchase and Rate Votes: In the past MPC meeting, the Bank kept the rate unchanged at 0.5% and the asset purchase program at £375 billion; this vote count will show how many MPC members voted on any changes to the asset purchase program or interest rate;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will decide on its overnight rate decision – the rate is currently set at 1%. The BOC may leave its policy unchanged and maintain its interest rate at its current level; the economic developments in Canada might prompt BOC to eventually reduce its cash rate;

15:00 – Bank of Canada’s Monetary Policy Report: The Bank of Canada will publish its quarterly monetary policy report and will also have a press conference; if the Bank presents any shifts in this press conference; it could affect the Canadian dollar;

02:45 – China Manufacturing PMI (flash): HSBC will publish its flash manufacturing PMI survey for January. Last month’s report regarding December 2013 the Manufacturing PMI inched up to 50.5 – i.e. China’s manufacturing sectors is growing but at a slightly slower pace. If in the upcoming update the PMI index continues to decline, it could signal the progress in China’s economy is slowing down. This may also affect commodities prices;

Thursday, January 23rd

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding December 2013, the Germany’s PMI increased again to 54.2 i.e. the manufacturing conditions are growing at a slightly faster rate. France’s PMI slipped to 47.1. This report serves signals to the changes in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

09:00 – Euro Area Current Account: In the last report, the gap in value between imported and exported goods, services, income flows, and unilateral transfers expanded to 21.8 billion Euros;

13:30 – Canada Core Retail Sales (November 2013): This report will pertain to the manufacturing sales in Canada as of November. It may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the last report regarding October 2013, manufacturing sales rose by 0.4%;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on January 17th; in the last report the jobless claims slipped by 2k to reach 326k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

14:00 –U.S flash manufacturing PMI: This report will show a flash of the monthly changes in the manufacturing sectors during January; as of December, the manufacturing PMI inched up to an index of 54.4;

15:00 – U.S. Existing Home Sales: This report will present the shifts in U.S. existing home sales during December 2013; in the last report regarding November 2013 the number of homes sold fell to a seasonally adjusted annual rate of 4.90 million houses; if this trend persists, it might adversely affect the U.S dollar;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on January 17th;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of January 17th;

Friday, January 24th

13:30 – Canada Core CPI: This monthly update will show the changes in the CPI and core CPI of Canada for December; in the previous report, the core CPI  inched down by 0.1%;

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