Financial Market Forecast for July 21-25

Oil prices recovered last week on account of the rise in tension between the U.S and Russia. Moreover, this news provided some backwind for gold and silver but it wasn’t enough to offset the huge selloffs in precious metals market earlier in the week. Natural gas fell down to its lowest level in 2014. This week, the main reports of the week will include: U.S new and existing home sales, , Canada’s retail sales, China, Germany and France’s manufacturing PMI indexes, Carney and Stevens will give speeches, GB GDP for Q2, U.S CPI, BOE rate decision, U.S core durable goods, and Great Britain net borrowing. So let’s break down the economic calendar for the week of July 21st to July 25th.  

(All times GMT): 

Monday, July 21st

04:00 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Anika Foundation Luncheon, in Sydney; this speech may affect the Aussie dollar;

Tuesday, July 22nd

09:30 – Great Britain Net Borrowing: According to last month’s update, public sector’s net borrowing in Great Britain rose to 11.5 billion pounds;

13:30 – U.S Core Consumer Price Index: This monthly report refer to the main changes in the core consumer price index for June 2014. According to the U.S Bureau of Labor statistics, during May, the CPI rose by 0.4%; the core CPI also increased by 0.3%; this report could impact the USD and the FOMC’s monetary policy;

15:00 – U.S. Existing Home Sales: This report will present the changes in U.S. existing home sales for June 2014; in the recent report regarding May, the number of homes sold increased to a seasonally adjusted annual rate of 4.89 million houses; if this trend continues, it may positively affect the U.S dollar;

00:30 – Australia’s CPI for Q2 2014: This quarterly report will refer to the developments in the consumer price index. In the last report regarding the first quarter of 2014, the CPI rose to 0.6% compared to the fourth quarter and reached a growth rate of 2.9% compared to Q1 2013; this report could affect the Aussie dollar, which is correlated with commodities prices;

Wednesday, July 23rd

09:30 –MPC Asset Purchase and Rate Votes: In the previous MPC meeting, the Bank left its cash rate at 0.5% and the asset purchase program at £375 billion; the Bank is likely to keep its rate unchanged;

12:45 –BOE Governor Carney Speaks: The Governor of Bank of England will speak at the Commonwealth Games Trade and Investment conference, in Glasgow;

13:30 – Canada Core Retail Sales: This report may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the last report regarding April 2014, manufacturing sales rose by 0.7%;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on July 18th;

23:50 – Japanese Trade balance: Back in April 2014 the Japanese trade balance deficit slightly widened to 860 billion yen (roughly $8.48 billion) deficit (seasonally adjusted figures). Japan is among the leading importers of commodities, including crude oil and gold; its trade balance could offer information vis-à-vis Japan’s developments in its demand for goods and services;

02:45 – China Manufacturing PMI (flash): HSBC will release its flash manufacturing PMI survey for July. Last month’s report regarding May 2014, the Manufacturing PMI rose again to 50.8 – i.e. China’s manufacturing sectors is scaling up. If in the upcoming report the PMI index rises again, it means China’s manufacturing sector is improving;

Thursday, July 24th

08:00 – Spain’s Unemployment Rate: Last quarter’s report showed that the rate of unemployment inched down to 25.9%;

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly update regarding June 2014, France’s PMI dropped to 47.8 i.e. the manufacturing conditions are contracting. Germany’s PMI slightly declined to 52.4 – the industry still grows but a slower pace. These estimates show the developments in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

09:30 – Great Britain Retail Sales: According to last month’s report, retail sales in Great Britain fell by 0.5%; this report could affect the British pound;

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 18th; in the last report the jobless claims rose by 3K to reach 302K;

15:00 – U.S. New Home Sales: This report will refer to June 2014; in the last report (opens pdf; for May), the sales of new homes rose to an annual rate of 504,000 – a 16% rise (month-over-month); if the number of home sales keep picking up, this may suggest the housing market in the U.S is heating up;

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 July 18th;

Friday, July 25th

09:00 – German Ifo Business Climate Index: This index comprises of the shifts (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of July. In the last report regarding June 2014, the business climate index declined to 109.7;

09:00 – Euro Area Monetary Development: This monthly update will pertain to the changes of the M3, M1 and loans to private sector in the Euro area as of June 2014. In the previous May report, the annual growth rate for M3 rose to 1%; M1 also slid to 5%. Finally, the annual growth rate of loans to private sector fell to -2%. This news suggests the EU inflation isn’t heating up as the growth rate of M1 dropped, and loans continue to shrink;

09:30 – Flash Great Britain GDP Q2 2014: This report will show the first estimate of the quarterly growth rate of the British economy for the second quarter of 2014; during the first quarter the GB economy expanded by 0.8% (Q-2-Q);

13:30 – U.S Core Durable Goods: This monthly report regarding June will indicate the developments in U.S demand for commodities including oil and gas. As of May 2014, new orders of manufactured durable goods slipped to $238.3 billion – a 0.9% drop compared to April; if this report shows additional contraction in new orders, then it could drag down not only the USD but also commodities;

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