Financial Market Forecast for March 17-21

Leading energy commodities dropped, while precious metals rallied during the past week. The US dollar depreciated against leading currencies such as Euro and Japanese yen during last week. This week several reports, speeches and events will come to fruition including: FOMC meeting and press conference, U.S CPI, German zew economic sentiment, U.S existing home sales, Japan’s trade balance,  EU economic Summit, Governor Carney Speaks,  U.S housing starts, Philly Fed Manufacturing Index, SNB rate decision,  GB climate count, MPC rate vote, Canada’s retail sales, U.S CPI, and Governor Poloz speaks.  Here is an economic forecast for the week of March 17th to March 21st regarding the U.S, Euro Area, Great Britain, Canada, and Japan.

(All times GMT):

Monday, March 17th

10:00 – EU CPI: According to the recent report, the CPI slightly remained unchanged at an annual rate of 0.8% during January. The changes in EU’s inflation could affect ECB’s monetary policy;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital monthly report will present the developments the purchases and sales of US long term treasuries for January 2014. In the previous report regarding December 2013, the net foreign sales of U.S Treasuries longer-term notes reached a deficit of $45.9 billion;

14:15 –U.S Industrial Production: This report will show the monthly shifts in the U.S industrial production during February; as of January, the production inched down by 0.3%; this report may affect the US dollar;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia left its interest rate flat at 2.50%, and the RBA is likely to maintain its monetary policy and its rate in the near future. The minutes of the last monetary policy meeting may offer some insight behind its recent decision; this news may affect the Australian dollar and consequently commodities prices;

Tuesday, March 18th

10:00 – German ZEW economic sentiment: The next report will pertain to the ZEW indicator of economic sentiment for Germany for February. In January, the ZEW indicator for Germany tumbled down to 55.7 points; if Germany’s economic sentiment continues to decline, the Euro could plausibly weaken against other currencies including the US dollar;

13:30 – Canada Manufacturing Sales: In the recent report regarding January 2014, manufacturing sales decreased by 0.9%;

13:30 – U.S. Housing Starts: The U.S Census Bureau will release its U.S housing starts monthly update for February 2014; this report was historically linked with gold price – as housing starts fall, gold tends to increase the next day (even when controlling to the U.S dollar effect); in the past report, housing starts fell by 12% during January to reach over 880k houses;

13:30 – U.S. Building Permits: In the last update, during January, building permits fell by 5% (m-o-m) as the adjusted annual rate of building permits reached 940k. If building permits continues to fall, it may indicate that the U.S housing market is cooling down (the recent U.S building permits update);

13:30 – U.S Core Consumer Price Index: This monthly update pertain to the main changes in the core consumer price index for February 2014. Based on the U.S Bureau of Labor statistics, during January, the CPI inched up by 0.1%; the core CPI also edged up by 0.1%; this report could affect the USD and may also affect the FOMC’s monetary policy;

16:55 –Governor Poloz speaks: The Governor of Bank of Canada will give a speech at the Chamber of Commerce, in Halifax; He will also hold a press conference after the speaking time is over; his words could affect the direction of the Canadian dollar;

18:45 –BOE Governor Carney Speaks: Governor Carney will speak at the Annual Mais Lecture, in London;

23:50 – Japanese Trade balance: Back in January 2014 the Japanese trade balance deficit expanded to 1,820 billion yen (roughly $18.02 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 changes in its demand for goods and services;

17:15 –Bank of Japan Governor Kuroda Speaks: Governor Kuroda is expected to speak at the International Financial Symposium hosted by the International Institute for Monetary Affairs, in Tokyo;

Wednesday, March 19th

09:30 – Great Britain Claimant Count Change: As of last month, the number of unemployed in GB dropped again by 27.6k; the rate of unemployment inched up to 7.2%;

09:30 –MPC Asset Purchase and Rate Votes: In the past MPC meeting, the Bank maintained its cash rate 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;

13:30 – Great Britain’s Annual Budget Release: The government will publish the 2014 budget, which will outlines the government’s expected spending and income levels, borrowing levels, financial objectives, and planned investments; this release could affect the British pound and could also affect the BOE monetary policy;  

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on March 14th;

18:45 – SNB Chairman Jordan Speaks: Chairman Jordan will participate in a panel discussion titled “Against the Moral Hazard: Lessons from the Financial Crisis” at the University of Bern;

19:00 – FOMC Meeting and Press Conference: The highly anticipated second FOMC meeting for this year will take place between March 17th and 18th. The FOMC will decide whether it will taper again QE3 and whether it will announce of any changes to its future monetary policy, i.e. the timing of when to raise its cash rate. Since the labor market showed signs of progress in the past month and the inflation remains stable, the FOMC might decide to reduce again its QE3 program by another $10 billion to $55 billion a month of asset purchase program. Keep in mind, however, that the FOMC might come up with additional monetary measures to kick-start the economy. After all, the GDP growth rate isn’t high, the labor market is still not doing well, the inflation is still very low, and the housing market is slowing down. If the Fed tapers again QE3, it is might pull up USD and pressure down (for a short period) gold and silver prices. If the Fed also pushing back the rate hike, this could also have a negative effect on precious metals. This time, the FOMC chair Yellen will hold a press conference and the FOMC will also provide an updated outlook for the progress of the U.S economy;

Thursday, March 20th

07:15 –Bank of Japan Governor Kuroda Speaks: Governor Kuroda will speak at the Japan Chamber of Commerce and Industry, in Tokyo;

09:30 – Libor Rate of Swiss National Bank: The Swiss National Bank will release its Libor rate decision; this decision could affect not only currencies markets but also commodities markets, assuming, the bank changes its Libor rate;

All Day – EU Economic Summit: The EU ministers of finance will meet and talk about the recent economic developments in EU;

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 March 14th; in the recent report the jobless claims slipped by 9k to reach 315k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

15:00 – Philly Fed Manufacturing Index: This monthly survey projects the growth of the US manufacturing sectors. In the last survey regarding March, the growth rate dropped from +9.4 in January to -6.3 in February. If the index further falls, it may adversely affect not only U.S Dollar but also U.S equity markets and commodities (the recent Philly Fed review);

15:00 – U.S. Existing Home Sales: This report will present the shifts in U.S. existing home sales during February 2014; in the last report regarding January, the number of homes sold dropped to a seasonally adjusted annual rate of 4.62 million houses; if this trend persists, it might adversely affect the U.S dollar;

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 March 14th;

Friday, March 21st

10:00 – EU Current Account: In the previous report, the EU’s current account balance reached a 21.3 billion Euros – a decrease compared to the preceding month;

13:30 – Canada Core Retail Sales (January 2014): This report will refer to the manufacturing sales in Canada as of January. It may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the last report regarding December 2013, manufacturing sales dropped by 1.8%;

13:30 – Canada Core CPI: This monthly report will present the developments in the CPI and core CPI of Canada for January; in the recent report, the core CPI rose by 0.2%;

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