Financial Market Forecast for September 29- October 3

The weakness in the bullion market and the recovery of US dollar continued last week. This week, we have a lot of news items that could push around the foreign exchange and commodities markets. In the U.S we have the NF payroll, core PCE, manufacturing and non- manufacturing PMI and factory orders reports. In Europe, the ECB will announce of any changes to its policy and Retail sales and flash CPI reports will be published. Great Britain’s final GDP estimate for Q2 and manufacturing PMI reports will come out.  In China the manufacturing PMI estimates will be released.  So let’s break down the economic outlook for the week of September 29th to October 3rd:

(All times GMT):

Monday, September 29th

Tentative – Germany’s Preliminary CPI: In the last CPI report for August 2014, the CPI remained flat. This time the expectations are for a modest drop of 0.1%;

13:30 – U.S. core PCE: The personal consumption expenditures index is another key measure the FOMC follows in assessing the progress of the inflation. In the last report, the price index of the PCE slipped by 0.1% and the core PCE (excluding food and energy) edged up by 0.1%. On an annual rate, the core PCE rose by only 1.5% – still below the FOMC’s inflation target.

15:00 – U.S Pending Home Sales: This report shows the shifts in pending home sales in the U.S during August; in the previous update for July, pending home sales index increased by 3.3% (month-over-month). This report is another signal for the progress of the U.S housing market; if the index keeps recovering, it may positively impact the U.S dollar;

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate for its September’s PMI index. Last month’s Manufacturing PMI fell to 50.2 – i.e. China’s manufacturing sectors are growing at a slower pace. If the updated PMI index falls again, this may imply China’s manufacturing conditions aren’t improving;

Tuesday, September 30th

07:00 – Germany’s Retail Sales: In the latest report for August 2014, retail sales fell by 1.4%; this month’s estimates are for a gain of 0.6%;

08:00 – KOF Economic Barometer: This report projects the progress of the Swiss economy in the coming months;

09:30 – GB Current Account: This quarterly report will present any changes in the gap between the impost and exports as of the recent quarter. According to the last update, the deficit contracted to 18.5 billion pounds.  This report might impact the British Pound;

09:30 – Final GB GDP 2Q 2014 Estimate: This will be the last estimate of GB’s second quarter 2014 real GDP growth. In the last estimate GB’s GDP grew by 0.8%%. Currently, the market expectations are for the GDP to remain at a growth rate of 0.8%;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro Area. According to the last estimate for August, the annual CPI edged down to 0.3%. The core CPI is slightly higher at 0.9%. In either case, it’s well below the ECB’s target inflation of 2%. If the inflation rate doesn’t rise, this could indicate the EU economy isn’t heating up. The current estimates are for the inflation to remain at 0.3% and the core CPI to remain at 0.9%;

10:00 – EU Unemployment Rate: Last month’s update showed that the rate of unemployment remained at 11.5%. This figure suggests the labor market in the Euro Area isn’t progressing;

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for July 2014. In the last update regarding June 2014, the real gross domestic product slightly rose by 0.3%;

15:00 – U.S Consumer Confidence: According to the last report for August, the consumer confidence index rose to 92.4, which suggests the consumer spending is recovering;

02:00 – China Manufacturing PMI: As of August, the Manufacturing PMI slipped to 51.1 – i.e. China’s manufacturing sectors are growing at a slightly slower pace. If in the upcoming report the PMI keeps falling, it could signal a slowdown in the progress of China’s manufacturing sectors;

02:30 – Australian Retail Sales: In the recent report referring to July, the seasonally adjusted retail sales rose by 0.4%; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

Wednesday, October 1st

09:30 – GB Manufacturing PMI: During June, Great Britain’s manufacturing index dropped to 52.4;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will release its estimate for the next U.S non-farm payroll changes for September 2014 that will be published on Friday;

15:00 – U.S Manufacturing PMI: This report will pertain to September 2014. Back in August, the index rose to 59; this means the manufacturing is expanding at a faster pace; this index may impact stock markets, USD, and crude oil and natural gas markets;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The Energy Information Administration will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on September 26th;

01:30 – Australian Trade Balance: The upcoming update will pertain to August. In the last update, for July, the seasonally adjusted balance of goods and services reached a $1.36 billion deficit; the report will also show the changes in the exports of gold; if gold exports rise, it might suggest an increase in demand for non-monetary gold (see here latest update);

Thursday, October 2nd

09:30 – GB Construction PMI: In the previous monthly update, this index rose to 64;

12:45 – ECB Rate Decision: ECB will update its monetary policy for September. Following last month’s rate cut surprise, Mario Draghi may refer to additional about the ECB’s future plans to implement the bank’s ABC program. It’s unlikely to see another rate cut as the bank stated the rate reached its lower bound. But Draghi’s words could impact the Euro especially if he were to refer to ECB’s future monetary policy;

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 26th; in the last report the jobless claims rose to 293K;

15:00 – U.S Factory Orders: This report presets the developments in U.S. factory orders of manufactured durable goods in September; in the latest report factory orders rose by 10.5%; this report will offer some insight regarding the developments in the U.S economy;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the latest shifts in natural gas production, storage, consumption and prices as of September 26th;

Friday, October 3rd

09:30 – GB Services PMI: In the last report, this index pulled up to 60.5; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly report will refer to August 2014. In the recent report, the volume of retail trade fell by 0.4% during July;

13:30 – Canadian Trade Balance: In the last report, the trade balance moved from $1.9 surplus in June to $2.6 billion surplus in July; if the trade balance shows a sharp change, it could move the Canadian dollar;

13:30 –American Trade Balance: This monthly update for July will present the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the last American trade balance update regarding June the goods and services deficit narrowed to $40.5 billion;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report referring to August 2014, the number of non-farm payroll employment grew by only 142K; the U.S unemployment rate edged down to 6.1%. In the previous four reports, the growth in employment was well above 200K each time. If the upcoming report shows another strong gain of over 200K (current estimates are at 216K), this could further pull up the USD and slightly drag down gold and silver;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will pertain to September 2014. In the last report, this index rose to 59.6% — the non-manufacturing sector is growing at a faster pace compared to the last month;

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