Weekly Outlook of Financial Markets for August 20-24

During last week, some commodities prices –crude oil – and forex rates –Euro/USD – resumed their rally. On the other hand, gold and silver prices remained nearly unchanged, while natural gas and Aussie dollar declined. The news of the contraction of the EU GDP for Q2 2012 by 0.2% didn’t hold back the Euro/USD from rising during last week. The U.S financial reports that came out last week – Philly Fed Index, U.S housing starts – didn’t show much progress. Will this unclear trend continue during the upcoming week?  There are several important speeches and reports that may affect the financial markets including: Japan’s trade balance, GB GDP for Q2 2012, U.S core durable goods, minutes of FOMC monetary policy, U.S new and existing home sales, Canada retail sales, Euro Zone and China’s flash manufacturing PMI, RBA’S President speech and U.S. jobless claims. Here is an economic news calendar forecast for August 20th to August 24th regarding the U.S., China, Australia, EU, Japan, GB and Canada.   

(All times GMT):

Monday, August 20th

00:30 – Minutes of Australia’s Bank Monetary Policy Meeting: The minutes of the monetary policy meeting of the reserve bank of Australia will refer to the main factors that affected the board’s decision to leave the basic interest rate unchanged at 3.5%; the minutes of this meeting may affect the Australian dollar exchange rate and consequently commodities prices including crude oil and silver rates;

Tuesday, August 21st

09:30 – Great Britain Net borrowing: this report will show the monthly developments in the public sector net borrowing for July 2012; as of June 2012, the net borrowing declined to £12.1 billion;

00:50 – Japanese Trade balance: The Japanese trade balance deficit for June 2012 fell by 51.4% compared to May, and reach 300 billion YEN (roughly $3.79 billion) deficit (seasonally adjusted figures). This fall is due to the drop in imports by 6.5%, and despite the decline in exports by 1.4%. Japan is among the leading importing countries of commodities, including crude oil and gold; its trade balance could provide some information about Japan’s shifts in demand goods and services;

Wednesday, August 22nd

13:30 –Retails Sales Canada (June 2012): This report will present the changes in the retails sales in Canada during June 2012. It may affect the direction of USD/CAD exchange rate, which is strongly correlated with commodities prices. In the previous report regarding May 2012, retails sales rose by 0.3%;

15:00 – U.S. Existing Home Sales: This report will refer to the changes in U.S. existing home sales for July 2012; in the previous report regarding June 2012 the number of homes sold declined: the seasonally adjusted annual rate of 4.37 million home sales; if this trend will continue it may curb the rally of the U.S dollar;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on August 17th; in the recent weekly update for August 10th, stockpiles declined by 4.5 million bl to 1,795 million bl;

19:00 – Minutes of July’s FOMC Meeting: Following the latest FOMC meeting, in which it was decided to keep the monetary policy unchanged without introducing any additional stimulus plans, the bullion market reacted to this news – gold and silver prices declined the next day. The minutes of the recent FOMC meeting might add some insight behind this non-decision and the future steps of the FOMC especially in anticipation of the upcoming FOMC meeting at the middle of September;

03:30– China flash Manufacturing PMI: this survey covers 800 companies in 20 industries in China; according to the HSBC Manufacturing PMI flash report for July 2012 the Manufacturing PMI rose to 49.5, which means the manufacturing conditions are still not progressing in China; if this negative index will continue, this may adversely affect commodities prices, unless China will act to stimulate its economy;

Thursday, August 23rd

09:00 – Flash German, French and Euro Area Manufacturing PMI (August 2012): In the previous report regarding July 2012, the Euro Zone Manufacturing PMI declined to 44.1, the German PMI also fell to 43.3 i.e another the manufacturing conditions are still contracting. This report will provide an indicator to the economic progress of the Euro zone and the leading economies’ manufacturing conditions; this news, in turn, might affect the Euro/USD exchange rate and consequently also major commodities rates;

13:30 – U.S. Jobless Claims Weekly Report:  this update will refer to the weekly changes in the initial jobless claims for the week ending on August 17th; in the recent update the jobless claims rose by 2k to 366,000; this upcoming weekly report may affect the U.S dollar and consequently commodities rates;

15:00 – U.S. New Home Sales: This report will refer to July 2012; in the previous report (regarding June 2012), the sales of new homes declined to an annual rate of 350,000 – a 8.4% drop (month over month); if the number of home sales will continue to fall, it may further indicate a sign of little recovery, if at all, in the U.S real estate market which may also affect the strength of the US dollar;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and prices as of August 17th; in the previous weekly update, natural gas storage increased by 20 Bcf to 3,261 Bcf;

00:30 –Bank of Australia Governor Stevens speaks: Following the recent rate decision, Governor Stevens of Bank of Australia will give a speech; if the speech will reveal the future plans of the Bank vis-à-vis its monetary policy and the Bank’s future steps it could affect the Aussie dollar, which is strongly correlated with commodities rates;

Friday August 24th

09:30 – GB revised GDP Q2 2012: This report will present the revised quarterly growth rate of the British economy during the second quarter of 2012; according to the preliminary estimate the second quarter contracted by 0.8% (yearly scale);

13:30 – U.S Core Durable Goods: This report will refer to the developments in U.S. orders of durable goods in the manufacturing sector for July 2012. This report may indirectly present the changes in U.S. demand for commodities such as crude oil. As of June 2012, new orders of manufactured durable goods rose by $3.4 billion to $221.6 billion; if this report will continue to be positive then it could strengthen not only the US dollar but also commodities prices;

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