Financial Market Preview for January 5-9

The first full week of 2015 is upon us and the markets are likely to heat up from their holiday slumber. The main news headlines from the U.S. including minutes of the recent FOMC meeting and the NF payroll report. Other financial reports from the U.S. include non-manufacturing PMI, factory orders and trade balance monthly reports. In Europe, MPC rate decision will take place. The EU flash CPI, unemployment report, GB’s manufacturing PMI and Germany retail sales will also be released. In China, CPI and trade balance will be published. There are also several economic reports from Canada and Australia. So let’s break down the agenda for the week of January 5th to 9th:

(All times GMT):

Monday, January 4th

Tentative – Germany’s Preliminary CPI: In the last CPI report for November 2014, the CPI remained flat. This time the expectations are for the CPI to inch up by 0.1%;

09:30 – GB Construction PMI: In the last monthly update, the index declined again to 59.4;

Tuesday, January 6th

01:30 – Australian Trade Balance: The next report will pertain to November. In the previous update, for October, the seasonally adjusted balance of goods and services reached a $1.32 billion deficit; the report will also show the shifts in the exports of non-monetary gold (see here the previous update);

09:30 – GB Services PMI: In the last report, this index bounced back to 58.9; this index may impact the direction of the British Pound;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to December 2014. In the last report, this index rose to 59.3% — the non-manufacturing sector is growing at a faster rate compared to the last month; current estimates are for the PMI to slide back to 58.2;

15:00 – U.S Factory Orders: This report presents the changes in U.S. factory orders of manufactured durable goods in December; in the latest report regarding November factory orders declined again by 0.7%; current projections are for a 0.3% fall during last month;

Wednesday, January 7th

07:00 – Germany’s Retail Sales: In the latest report for November 2014, retail sales rose by 1.9%; this month’s estimates are for a gain of 0.2%;

10:00 – EU CPI Flash Estimate: This index estimates the yearly consumer price index of the Euro Area. According to the previous estimate for November, the annual CPI reached only 0.3%. The core CPI didn’t change at 0.7%. In either case, it’s well below the ECB’s target inflation of 2%. The current estimates are for the inflation to fall to 0% and the core CPI edge down to 0.6%;

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

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

13:30 – Canadian Trade Balance: In the recent report, the trade balance moved from $0.7 billion surplus in September to $0.1 billion deficit in October;

13:30 –American Trade Balance: This monthly report for September will present the changes in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; according to the previous American trade balance update regarding October the goods and services deficit expanded to $43.4 billion; current projections are for the deficit to decline to $42.3 billion;

15:00 – Canada Ivy PMI: This index is based on surveyed purchasing managers; last time, the PMI rose to 56.8, which shows growth at a faster pace;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The Energy Information Administration will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on January 2nd;

19:00 – Minutes of FOMC Meeting: This will be among the main events of the week. In the last 2014 meeting back in December, the FOMC decided to change the wording of the statement. The FOMC tried to create a well balanced message that won’t lean towards the hawks or the doves. So even though the FOMC cut down the “considerable time” phrase as a policy guideline, they still kept it as reference for their current policy. As a result the statement was a bit convoluted and didn’t too much new information about the next move of the Fed, i.e. any news about raising rates. The minutes may offer insight behind the recent statement, which had the most dissenters in recent years;

Thursday, January 8th

06:00 – German Factory Orders: In the last report, factory orders rose by 2.5% during November;

10:00 – EU Retail Sales: This monthly report will refer to November 2014. In the previous report, the volume of retail trade rose by 0.4% during October;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will publish its basic rate for January 2015; the MPC will also announce of any changes to its asset purchase pogrom; the current expectations are for no changes to the rate at this point in time; BOE’s interest rate remained at 0.5% and the asset purchase plan at £375 billion, as of last month;

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 January 2nd; in the latest report, the jobless claims slipped again to 298K;

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 January 2nd;

Friday, January 9th

01:30 – Australia’s Retail Sales: In the last report, the volume of retail trade rose by 0.4%;

02:30 – China’s CPI: According to the recent update, the CPI slipped to an annual rate of 1.4%; if the annual rate remains low, it could signal the Chinese economy isn’t heating up; the current expectations are for the CPI to slightly rise to 1.5%;

07:45 – French Industrial Production: This report presents the development in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. Last month’s index declined by 0.8%;

09:30 – Great Britain Manufacturing Production: This report will present the annual rate of GB’s manufacturing production as of November; in the last report regarding October 2014 the index declined by 0.7%; this time, the estimates are for 0.4% gain in November;

13:30 – U.S. Non-Farm Payroll Report: In the previous employment report referring to November 2014, the number of non-farm payroll employment rose by 321K – higher than expected; the U.S unemployment rate remained flat at 5.8%. If the upcoming report shows another strong gain (current estimates are at 241K), this could further strengthen the USD and bring down bullion prices;

13:30 – Canada’s Employment Report: In the recent employment update for November 2014, unemployment edged up to 6.6%; the employment slipped by 10.7K;

Tentative – China’s Trade Balance: According to the recent monthly update, China’s trade balance grew to a $54.5 billion surplus; the current estimates are for the trade balance to shrink to $48.9 billion;

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