Weekly Outlook of Financial Markets for August 26-30

Major commodities including gold, silver and natural gas rallied again during last week. Equities markets also made a bit of comeback as major indexes including the S&P500 rose.  In the forex market, however, there was a mixed trend as the Euro rallied against the USD while Aussie and Japanese yen fell against the USD. This week, several reports, speeches and events will could affect commodities, equities and forex markets; these include: Carney’ speech, U.S core durable goods report, China manufacturing PMI,  U.S consumer confidence, Canada’s GDP, U.S’s GDP second quarter estimate, Germany’s employment situation, U.S pending home sales, German retail sales, and U.S. jobless claims. Here is a breakdown for the week of August 26th to August 30th referring to U.S, China, Euro Area, Australia, Canada, and Great Britain. 

(All times GMT):

Monday, August 26th

13:30 – U.S Core Durable Goods: This report will refer to July 2013. This monthly report may indirectly indicate the shifts in U.S. demand for commodities such as oil and gas. As of June 2013, new orders of manufactured durable goods increased to $496.7 billion; if this report will show another increase in new orders then it could pull up not only the USD but also commodities prices;

Tuesday, August 27th

09:00 – German Ifo Business Climate Index: This index comprises the developments (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of August. In the recent report for July 2013, the business climate index inched up from 105.9 in June to 106.2 in July; if this trend will continue, it might positively affect the Euro;

15:00 – U.S Consumer Confidence: According to the latest monthly update, for May, the consumer confidence index fell to 80.3 (month-over-month). The current expectations are that the July index may change direction and rise; this report might affect commodities prices including the oil and natural gas;

Wednesday, August 28th

09:00 – Gfk German Consumer Climate Survey: This survey estimates Germany’s consumers’ economic climate including past and future economic conditions (on a monthly basis) for August. In the latest report for July 2013, the climate index slightly rose to 7;

09:00 – Euro Area Monetary Development: This monthly update will refer to the changes of the M3, M1 and loans to private sector in the Euro area for July 2013. In the previous June report, the annual growth rate for M3 declined to 2.3%; M1 fell to 7.5%. Finally, the annual growth rate of loans to private sector reached -1.6%. This news suggests the EU inflation is falling again as loans continue to fall and the growth rate of M1 and M3 decrease. The progress of the EU monetary base is likely to affect the ECB rate decisions in the following months;

12:45 –BOE Governor Carney Speaks: Governor Carney will speak at the   East Midlands Conference Centre, in Nottingham;

15:00 – U.S. Pending Home Sales: This report presents the shifts in pending home sales in the U.S for July; in the recent report, the pending home sales index slipped by 0.4% (month-over-month). These data are another signal for the changes in U.S’s housing market; if the housing data will show additional decline in sales it may pull back the U.S dollar;

15:30 – U.S Crude Oil Stockpiles Weekly 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 25th; the changes in stockpiles could affect the direction of crude oil price in the U.S; 

02:30 – Australia Private New Capital Expenditure: This quarterly update shows the changes in the private new capital expenditures and expected expenditures for the second quarter of 2013. As of the previous quarter, the seasonal adjusted total of new capital expenditure tumbled down by 4.7% (Q-o-Q) and by 4.4% compared to the previous quarter in 2012. If this downward trend will continue, it may adversely affect the Aussie dollar, which tends to be strongly correlated with major commodities;

Thursday, August 29th

08:55 – German Unemployment Rate: During last month the unemployment slipped; the developments in the German workforce could affect the Euro/USD currency pair;

13:30 – Second U.S GDP 2Q 2013 Estimate: This will be the second estimate of U.S’s second quarter 2013 real GDP growth. In the previous estimate the U.S GDP rose by 1.7% in the second quarter of 2013. If the growth rate for the second quarter will be revised by a large margin, this could affect not only the US dollar but also commodities prices;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly update will pertain to the changes in the initial jobless claims for the week ending on August 25th; in the latest report the jobless claims rose by 13k to 336k; this upcoming weekly update may affect the U.S dollar and consequently commodities and stocks markets;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report on U.S. natural gas market will refer to the latest shifts in natural gas production, storage, consumption and rates as of August 25th; this news may affect the direction of natural gas prices;

Friday, August 30th

07:00 – German Retail Sales: This monthly update will present the changes in German retail sales during July. In June 2013, retail sales changed direction and fell by 1.5% – lower than many had expected; if this report will show another drop in sales then it might weakened the Euro;

08:00 – KOF Economic Barometer: this monthly report measures the estimate to the Swiss economy in the coming months;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro members. According to the previous estimate, the annual CPI reached 1.6%, which is still much lower than the ECB’s target inflation of 2%. If the inflation will start to pick up, it could indicate the EU economy is slowly picking up. These developments could influence the ECB when it’s time to decide on its interest rate; this news could affect the Euro/USD currency pair;

10:00 – EU Unemployment Rate: This report estimates the progress of the EU economy from the labor point of view. Last month’s report showed the rate of unemployment remained flat at 12.1%, which is still a high rate. If this downward trend will persist, it could positively affect the Euro;

13:30 – Canada’s GDP by Industry: this monthly update shows the developments in major industrial sectors for June 2013. In the latest report regarding May 2013, the real gross domestic product rose by 0.2%. This report may affect the direction of the Canadian dollar, which is strongly linked with major commodities rates;

13:30 – U.S Personal spending: this monthly report will refer to the shifts in income and outlays in the U.S during July; in the last report regarding June the personal income rose by 0.3%;

14:55 – UoM Consumer Sentiment (revised):University of Michigan will publish its revised consumer sentiment monthly report; this survey could offer information regarding the recent developments in U.S consumers’ sentiment; according to the latest report, the sentiment index increased to 85.1;

02:00 – China Manufacturing PMI: Last month’s report regarding July 2013 the Manufacturing PMI increased to 50.3 – i.e. China’s manufacturing sectors is expanding at a slightly faster pace; in the latest flash PMI report, the index rose to above the 50 point market. If in the upcoming report the PMI will keep rising, it could signal growth in China’s economic development. If the index will rise, this may positively affect leading commodities prices.

For further reading: