Financial Market Forecast for September 22-26

Following the FOMC meeting the commodities markets took a beating as oil, gold and silver tumbled down. These losses coincided with the recovery of USD against leading currencies such as Euro and Yen and the rally of U.S equities. On this week’s agenda: U.S GDP Q2 –final estimate, Draghi testifies, U.S existing home sales, China’s manufacturing PMI, U.S new home sales, EU manufacturing PMI , Canada’s retail sales, EU monetary development, and U.S durable goods.  So let’s review the economic colander for the week of September 22nd to 26th.  

 (All times GMT):

Monday, September 22nd

14:00 – ECB President Draghi Testifies: ECB President will testify on monetary policy before the European Parliament’s Economic and Monetary Committee, in Brussels;

15:00 – U.S. Existing Home Sales: This report will show the shifts in U.S. existing home sales for August 2014; in the recent report regarding July, the number of homes sold increased to a seasonally adjusted annual rate of 5.15 million houses; if this trend continues, it may pull up the U.S dollar; the current expectations are for the annul rate to rise to 5.21 million houses;

02:45 – China Manufacturing PMI (flash): HSBC will release its flash manufacturing PMI survey for September. Last month’s report regarding August 2014, the Manufacturing PMI dropped to 50.3 – i.e. China’s manufacturing sectors is expanding at a slower pace. If in the upcoming report the PMI index falls again, it means China’s manufacturing sector isn’t growing slower – the current estimates are for the PMI to inched down and reach 50;

Tuesday, September 23rd

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly update regarding August 2014, France’s PMI fell to 46.5 i.e. the manufacturing conditions are contracting faster. Germany’s PMI slipped to 52 – the industry still grows at 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 rates;

09:30 – Great Britain Public Sector Net Borrowing: According to last month’s update, public net borrowing reached a deficit of $1.1 billion; this measures the gap between spending and income for public corporations, the central government and local governments;

13:30 – Canada Core Retail Sales: This report may impact the USD/CAD currencies pair, which is strongly correlated with commodities. In the last update regarding June 2014, manufacturing sales rose by 1.5%;

Wednesday, September 24th

09:00 – German Ifo Business Climate Index: This index consists of the shifts (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of September. In the last report regarding August 2014, the business climate index declined to 106.3 – the current estimates are that the index will fall to 105.9;

15:00 – U.S. New Home Sales: This report will refer to August 2014; in the previous report (opens pdf; for July), the sales of new homes rose to an annual rate of 412,000 – nearly 1.4% gain (month-over-month); if the number of home sales continues to pull up, this may suggest the housing market in the U.S is recovering – current estimates are for a gain to annual rate of 432K;

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 September 19th;

00:30 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Melbourne Economic Forum; this speech may impact the Aussie dollar;

Thursday, September 25th

09:00 – Euro Area Monetary Development: This monthly report will refer to the developments of the M3, M1 and loans to private sector in the Euro area as of August 2014. In the previous July report, the annual growth rate for M3 increased to 1.8%; M1 also rose to 5.6%. Finally, the annual growth rate of loans to private sector declined to -1.6%. This news suggests the EU inflation is slowly rising as the growth rate of M1 increased, and loans continue to shrink but at a slower pace;

13:30 – U.S Core Durable Goods: This monthly report regarding August will indicate the developments in U.S demand for commodities including oil and gas. As of July 2014, new orders of manufactured durable goods reached to $300.2 billion – a 22.6% gain compared to June; if this report shows additional growth in new orders, then it could pull up not only the USD but also commodities;

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 September 18th; in the recent report the jobless claims fell to 280K;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of September 19th;

Friday, September 26th

09:00 – GfK German Consumer Climate: In the previous monthly update, the index slipped to 8.6. If the index continues to slowly falling, this could suggest the German economy isn’t improving;

13:30 – Final U.S GDP 2Q 2014 Estimate: This will be the third and final estimate of U.S’s second quarter 2014 real GDP growth. In the second estimate the GDP grew by 4.2%, which was slightly higher than the first estimate and much better than in the first quarter. Back then the U.S GDP fell by 2.9%. The current estimates are that the GDP will slightly pick up to 4.6%. If the US gross domestic product continues to grow, this could positively affect not only the US dollar but also commodities prices;

14:55 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the shifts in U.S consumers’ sentiment; according to the recent report, the sentiment index rose to 82.5;

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