Weekly Outlook of Financial Markets for April 29- May 3

Major commodities including oil, gold and silver rallied last week after they had tumbled a week earlier. Equities and forex markets haven’t done much during last week. The focus of attention might shift back to forex as many important meetings and decisions will come into play next week. These include: ECB rate decision, FOMC meeting, U.S non-farm employment report, China and U.S manufacturing PMI, Spain’s GDP first quarter estimate, EU economic outlook, Japan’s monetary base, U.S and Canada’s trade balance reports, and U.S. jobless claims.  Here is an economic outlook for the week of April 29th to May 3rd regarding the U.S, China, Euro Area, Japan, Canada, and Great Britain.   

(All times GMT):

Monday, April 29th

13:30 – U.S Personal spending: this monthly report will refer to the changes in income and outlays in the U.S during March; in the last report regarding February the personal income rose by 0.7%.

15:00 – U.S. Pending Home Sales: This report shows the developments in pending home sales in the U.S.; in the recent report, the pending home sales index slipped by 0.4% (M-over-M). These data are another indicator for the changes in America’s housing market; if the housing data will show a drop in sales it may pull down the U.S dollar;

Tentative – Italian 10 Year Bond Auction: the Italian government will come up with another bond auction; in the previous bond auction, which was held at the end of last month, the average rate reached 4.66%; the recent political developments in Italy might also affect the bond auction;

Tuesday, April 30th

07:00 – German Consumer Climate: Gfk group will publish its German consumer climate index. If this report will further show growth, it might pull up the Euro;

08:00 – Flash Spain’s GDP Q1 2013: This report will show the first estimate of the quarterly growth rate of the Spain’s economy in the first quarter of 2013; during the fourth quarter Spain’s economy contracted by 0.7% (Q-2-Q);

13:30 – Canada’s GDP by Industry: this monthly present the developments in major industrial sectors for February 2013. In the recent update regarding January 2013, the real gross domestic product rose by 0.2%. This report may affect the Canadian dollar, which is strongly correlated with major commodities prices;

15:00 – U.S Consumer Confidence: according to the recent monthly report, the consumer confidence index fell again in February to 59.7 (M-o-M). The current expectations are that the March index may continue to fall; this report might affect commodities rates including the oil and natural gas rates;

02:00 – China Manufacturing PMI: Based on the recent report regarding March 2013 the Manufacturing PMI edged up to 50.9; this means that China’s manufacturing sectors is expanding at a faster rate. The flash report showed that the PMI slipped in April but remained above the 50 point mark. If in the upcoming report the PMI will fall below the 50 point mark, it could signal slowdown in China’s economy. If the index will dwindle, this may also adversely affect commodities prices;

Wednesday, May 1st

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in March 2013. In the previous report regarding February 2013 the index rose to 48.3. This rate bump means the manufacturing sector is contracting at a slow pace; this index might affect GB Pound;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the forthcoming U.S non-farm payroll change for April 2013 that will be published on Friday;

15:00 – U.S. Manufacturing PMI: This report will refer to April 2013. During March 2013 the index fell to 51.3%; this means the manufacturing is growing at a slower pace; this index may affect foreign exchange rates, crude oil and natural gas markets.

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on April 26th; in the recent update for April 19th, stockpiles declined by 1.9 ml bl and reached 1,779.8 ml bl.

19:00 – FOMC Meeting: The FOMC will convene for the third time this year and announce at the end of two day of session of any updates to its monetary policy and interest rate. In the past couple of meetings the FOMC left its policy unchanged. Moreover, the meeting had little effect on the markets including precious metals. I suspect this will be the case this time. The statement won’t reveal much about the future steps of the Fed and only the minutes might shed some light on the deliberations among the FOMC members. Even in the press conference Bernanke doesn’t offer much news or updates that could stir up the markets. The big question will remain whether the Fed will change its policy in 2013. If The Fed will implement any changes, they will be announced as the year will wind down;

23:05 – BOC Gov Carney Speaks: Carney will speak at the University of Alberta, in Edmonton. His speech might affect the Canadian dollar if his speech will provide a surprising headline;

00:50 – Japan’s monetary base: Japan’s changes in its monetary base will come out. The rise in the asset purchase program of Bank of Japan is likely to pull up the monetary base and thus may show signs of the economy heating up. According to the recent report, the monetary base rose by 19.8% in the previous month. This report might affect the Japanese yen;

Thursday, May 2nd

12:45 – ECB Rate Decision: ECB will decide its cash rate for May. The current 0.75% rate hasn’t changed since July 2012. The most likely scenario is that ECB will keep the rate unchanged. But the recent hints of ECB President Mario Draghi along with the slowdown in the EU economy might eventually lead the ECB to cut its rate.  If ECB will cut the rate, the Euro is likely to fall and it will also drag along with it commodities prices;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly update will refer to the shifts in the initial jobless claims for the week ending on April 27th; in the latest report the jobless claims rose by 16k to reach 339k; this upcoming weekly report may affect the U.S dollar and consequently commodities and stocks markets;

13:30 –American Trade Balance: This monthly report for March 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 natural gas; based on the latest American trade balance report regarding February the goods and services deficit fell during the month to $43.0 billion;

13:30 – Canadian Trade Balance: In the previous report regarding February 2013, exports fell by 0.6% and imports inched up by 0.1%; as a result, the trade deficit widen from a $746 million deficit in January to $1.0 billion deficit in February; this report may affect the Canadian dollar which tends to be linked with prices of commodities;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report of the U.S. natural gas market will pertain to the latest developments in natural gas production, storage, consumption and rates as of April 26th; in previous weekly report, natural gas storage rose by 30 Bcf to 1,734 Bcf;

Friday, May 3rd

10:00 – EU Economic Outlook: This report is updated three times of year and will show the economic forecast for the EU nations for the next couple of years; if the outlook will be improve, it could help pull up the Euro;

13:30 – U.S. Non-Farm Payroll Report: in the previous update for March 2013, the labor market only slightly improved: the number of non-farm payroll employment rose by only 88k; the U.S unemployment rate edged down to 7.6%; if in the upcoming report the employment will rise again by below 150 thousand (in additional jobs), this may raise the prices of gold and silver (see here my last review on the U.S employment report);

15:00 – U.S Factory Orders: This report will show the shifts in U.S. factory orders of manufactured durable goods during April; in the previous report factory orders rose by 3%; this report will offer some insight regarding the growth of the U.S economy and could affect the direction of the U.S dollar;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to the developments in the non-manufacturing sector during April 2013. For latest update, this index fell to 54.4% – this means the non-manufacturing is expanding and at a slower pace than in the previous month; this index may affect the USD;

18:05 – BOC Gov Carney Speaks: Carney will participate in a panel discussion at the Cardus Convivium Project, in Toronto;

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