Financial Market Forecast for May 19-23

Leading commodities prices including oil and gold rallied last week; in the forex market the USD rallied against the Euro but depreciated against the Japanese yen and Canadian dollar. For the week of May 19th to May 23rd, several reports, decisions and talks will come to fruition and may affect commodities, equities and forex markets; they include: Minutes of the April FOMC meeting, U.S new and existing home sales, Yellen’s speech, BOE rate decision, GB CPI, minutes of RBA’s policy meeting, Canada’s core retail sales, Flash German, French and Euro Zone Manufacturing PMI, U.S jobless claims, and China’s flash manufacturing PMI.

(All times GMT):

Monday, May 19th

08:00 –German Buba President Weidmann Speaks: Dr. Jens Weidmann is the president of the Deutsche Bundesbank. He is also member of the Governing Council of the ECB. He will speak at a Symposium in Frankfurt;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia kept its interest rate at 2.50%, and the RBA is likely to maintain its monetary policy and its rate unchanged in the coming months. The minutes of the recent monetary policy meeting may offer some insight behind its latest decision;

Tuesday, May 20th

10:30 – GB CPI: According to the recent report, the CPI inched down to an annual rate of 1.6% during March. The changes in Great Britain’s inflation could affect BOE’s monetary policy;

23:50 – Japanese Trade balance: Back in March 2014 the Japanese trade balance deficit widened to 1,710 billion yen (roughly $16.76 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;

Wednesday, May 21st

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

09:30 –MPC Asset Purchase and Rate Votes: In the last MPC meeting, the Bank maintained its cash rate at 0.5% and the asset purchase program at £375 billion; if the Bank decides to change its interest rate or asset purchase program, this news could affect the British pound;

09:30 – Great Britain Retail Sales: According to last month’s update, retail sales in Great Britain edged up by 0.1%; this report could affect the British pound;

16:30 –FOMC Chair Yellen Speaks: FOMC Chair Janet Yellen will deliver opening remarks at the New York University Graduates Commencement Ceremony;

19:00 – Minutes of FOMC Meeting: Back in April, the FOMC meeting decided to taper again its asset purchase program by $10 billion to a pace of $45 billion a month. This news seems to have had a short adverse effect on the prices of gold and silver. Since then, , the U.S dollar depreciated against the Japanese yen and Aussie dollar. The upcoming minutes might shed some light on this decision, the FOMC’s future monetary steps and especially the decision process about setting the timing for raising its interest rate;

15:30 – U.S Crude Oil Stockpiles Weekly report: The EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on May 16th; the report will also show the changes in imports, refinery input and production, which could provide some perspective regarding the recent shifts in the price of crude oil in the U.S;

Thursday, May 22nd

02:45 – China Manufacturing PMI (flash): HSBC will release its flash manufacturing PMI survey for May. Last month’s report referring to April 2014 the Manufacturing PMI rose to 48.3 – i.e. China’s manufacturing sectors is contracting at a slower rate. If in the upcoming update the PMI index remains below 50, it means China’s manufacturing sector isn’t growing. This may also adversely affect commodities prices;

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the recent monthly report regarding April 2014, France’s PMI dropped to 50.9 i.e. the manufacturing conditions are growing at a slower pace. Germany’s PMI inched rose to 54.2. This report serves estimates 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;

09:30 – Second estimate of GB GDP Q1 2014: This report will show the revised estimate of the quarterly growth rate of the British economy for the first quarter of 2014; during the fourth quarter the GB economy grew by 0.7% (Q-2-Q); if the growth rate remains unchanged or very close to the first estimate, it could have a modest impact on the GB pound;

13:30 – U.S. Jobless Claims Weekly update: This weekly report will refer to the changes in the initial jobless claims for the week ending on May 16th; in the previous report the jobless claims fell by 24k to reach 297k; this next weekly report may affect the U.S dollar and consequently commodities and stocks markets;

13:30 – Canada Core Retail Sales: This report will pertain to the manufacturing sales in Canada as of March. It may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the last report regarding February 2014, manufacturing sales rose by 0.6%;

15:00 – U.S. Existing Home Sales: This report will present the changes in U.S. existing home sales during April 2014; in the last report regarding March, the number of homes sold edged down to a seasonally adjusted annual rate of 4.59 million houses; if this trend persists, it might adversely affect the U.S dollar;

15:30 – EIA U.S. Natural Gas Storage Update: The EIA weekly update refers to the U.S. natural gas market; the report presents the latest developments in natural gas production, storage, consumption and rates as of May 16th;

Friday, May 23rd

09:00 – German Ifo Business Climate Index: This index comprises of the changes (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of May. In the last report regarding April 2014, the business climate index rose to 111.2;

13:30 – Canada Core CPI: This monthly report will show the developments in the CPI and core CPI of Canada for March; in the recent report, the core CPI increased by 0.3%;

15:00 – U.S. New Home Sales: This report will refer to April 2014; in the recent report (opens pdf; for March), the sales of new homes rose to an annual rate of 384,000 – a 12.7% drop (month-over-month); if the number of home sales keep declining, this may suggest the housing market in the U.S is cooling down; this news may also affect the US dollar;

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