Weekly Outlook of Financial Markets for December 3-7

During last week, major commodities were traded in a mixed trend: oil prices edged up while precious metals and natural gas declined. The high volatility in some commodities prices during last week might continue this week as there are many items on this week’s agenda. Moreover, the next couple of weeks are likely to be interesting before the market will reach a halt in the last two weeks of the year. The main events of the week will revolve around non-farm payroll report, rate decisions of ECB, Bank of Canada, Reserve Bank of Australia and Monetary Policy Committee of Bank of England for Euro Area,  and U.S manufacturing PMI.  Several publications, speeches and events may affect the financial markets during this upcoming week. These include: Euro-group meeting, ECB President’s speech, U.S non-farm payroll report, China’s CPI, U.S manufacturing PMI , Spain’s bond sales, ECB rate decision, Spain’s rate of unemployment ,Australia’s GDP for Q3, Canada’s employment report, Canada, Australia and GB central banks rate decision and U.S. jobless claims. Here is an economic news calendar projection for December 3rd to December 7th regarding the U.S, EU, Canada, China, Australia, and Great Britain.   

(All times GMT):

Monday, December 3rd

All Day – Euro-group Meeting: The Euro-group Meeting will convene again in Brussels. Following last week’s Greek bailout decision, it lowers the chances that there will be any big decisions coming out of this meeting;

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in November 2012. In the last report regarding October 2012 the index declined to 47.5%. This rate means the manufacturing sector is contracting at a moderately faster pace; this index might affect GB Pound;

15:00 – U.S. Manufacturing PMI: This report will pertain to the monthly changes in the national manufacturing sector for November 2012. During October 2012 the index edged up to 51.7%, which means the manufacturing is growing at a slightly faster pace; this index may affect foreign exchange rates, crude oil and natural gas markets;

Tuesday, December 4th

05:30 – Reserve Bank of Australia – Cash Rate Statement: the overnight money market rate of Australia’s Reserve Bank left the rate at 3.25%, which is the lowest level since the end of 2009. If the RBA will decide to lower the rate again, this news may affect the Australian dollar that is strongly correlated with commodities prices;

08:00 – Spain’s unemployment Change: the rate of unemployment of the Spain rose again by 128k. This mean, the employment situation in Spain isn’t improving. If in the upcoming report this trend will continue, it may adversely affect the Euro;

14:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will publish its decision on the Canadian overnight interest rate, which remained unchanged at 1% as of the previous decision. The BOC may continue its policy and leave the interest rate unchanged;   on the other hand, the recent slowdown in Canada’s economy might prompt BOC to lower the rate;

All Day – ECONFIN Meeting: In the European Council Meeting the EU ministers of finance will meet and try to decide on a single supervisor bank for the bailout of commercial EU banks;

02:30 – Australian GDP Third Quarter 2012: This quarterly report will refer to the Australia’s GDP growth rate for the third quarter of 2012. In Q2 2012, the GDP expanded by 0.6% (seasonally adjusted) – a lower growth rate than in the first quarter. The slowdown in China’s economy might also adversely affect the growth of Australia’s GDP. Australia is among the leading countries in exporting commodities including as oil and metal ores; if the GDP growth rate will dwindle again it could affect the strength of Australia dollar (see here last report);

Wednesday, December 5th

13:15 – ADP estimate of U.S. non-farm payroll: ADP will publish its projection for the upcoming U.S non-farm payroll change for November 2012 in anticipation for the upcoming no-farm report to be published by the end of the week;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will refer to the developments in the non-manufacturing sector during November 2012. During October 2012 this index edged down to 54.2% – this means the non-manufacturing is growing and at a slightly slower rate than in the previous month; this index may affect forex and commodities trading;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will be publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on November 30th; in the recent weekly update for November 23rd, stockpiles declined by 1.4 ml bl to reach 1,781.5 ml bl;

Tentative – Spanish 10 Year Bond Auction: the Spanish government will come out with its monthly bond auction; in the last bond auction, which was held during the third week of November, the average rate reached 5.52% – a slightly higher rate than in the recent auction;

02:30 – Australia Employment Report: in the last report regarding October 2012 the rate of unemployment remained at 5.4%; the number of employed (seasonally adjusted) slightly rose by 10,700 people; the number of unemployed declined by 8,800 during October compared to September. This report could affect the Aussie dollar (see here the recent report);

Thursday, December 6th

Tentative – French 10 Year Bond Auction: the French government will issue its monthly bond auction; in the previous bond auction, which was held during by the end of October, the average rate reached 2.22%;

11:00– German Factory Orders: This report will refer to the changes in the factory orders of Germany for October; in the previous report the German factory orders declined by 3.3% (M-o-M);

12:00 – Great Britain Bank Rate & Asset Purchase Plan: Bank of England will decide on its basic rate for December 2012 and of any shifts in its asset purchase plan; as of November BOE left rate unchanged at 0.5% and the asset purchase plan was kept at £375 billion;

12:45 – ECB Press Conference and Euro Rate Decision: Back in July the ECB decided to reduce its cash rate was back in July by 0.25p to 0.75%. There are many reasons for ECB to cut the rate again: the economic situation in EU isn’t progressing, the inflation and monetary development dwindles, the Fed’s stimulus plan pressures up the Euro, and many EU banks continue to struggle. Thus, the ECB might decide to cut the rate by another 0.25pp. If ECB will cut the rate again, it may adversely affect the Euro to US dollar exchange rate;

13:30 – U.S. Jobless Claims Weekly Report:  this report will refer to the weekly changes in the initial jobless claims for the week ending on November 30th; in the previous report the jobless claims fell by 23k to reach 393k; this upcoming weekly update may affect the U.S dollar and consequently 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 recent shifts in natural gas production, storage, consumption and rates as of November 30th; in recent weekly update, natural gas storage edged up by 4 Bcf to 3,877 Bcf;

Friday, December 7th

02:30 – Australian Trade Balance: The upcoming update will refer to October 2012. In the previous report, the seasonally adjusted balance of goods and services expanded its deficit to $1,456 million in September. The export of non-monetary gold rose by $253 million; if the gold exports will continue to rise in October, it might suggest a rise in demand for non-monetary gold (see here last report);

09:00 – Swiss National Bank Foreign Currency Reserve: The Bank will come out with its current Foreign Currency Reserve; according to the pervious report, the forex reserves slightly declined;

09:30 – Great Britain Manufacturing Production: this report will show the yearly rate of GB’s manufacturing production for October; in the previous report regarding August the index edged up by 0.1% (M-2-M); this news may affect the British Pound;

10:00 – ECB President Speaks: Mario Draghi will give a speech at the “Anchor Conference”. Following the ECB rate decision, if the ECB President will refer to the ECB monetary policy the speech might affect the Euro to US dollar currency pair;

11:00– German Industrial Production: This report will pertain to the developments in the industrial production of the German for October; in the previous report the German industrial production declined by 1.8% (M-O-M) during September;

13:30 – Canada’s Employment Report: In the recent employment report for October 2012, unemployment remained at 7.4%; the employment also remained flat during last month. The upcoming report might affect the Canadian dollar and consequently the rates of commodities;

13:30 – U.S. Non-Farm Payroll Report: in the previous report for October 2012, the labor market expanded by a higher pace than expected: the number of non-farm payroll employment increased by 171k; the U.S unemployment rate edged up to 7.9%; if the upcoming report will continue to show growth of above 120 thousand (in additional jobs), this may lower the odds of the Fed introducing additional stimulus by next week’s FOMC meeting; this report may affect not only the U.S dollar, but also commodities (see here my last review on the U.S employment report);

14:55 – UoM Consumer Sentiment (preliminary): University of Michigan will come out with its preliminary consumer sentiment update; this survey could offer an insight to recent changes in U.S consumers’ sentiment regarding the economy; according to the previous update, the sentiment index increased again to 84.9;

02:30 – China’s CPI: during September the Chinese inflation rate edged down again to an annual rate of 1.7%; this rate is below China’s inflation target of 4% in annual terms. If the inflation will continue to fall it could indicate that China’s economy isn’t expanding; China is among the leading countries in importing commodities such as gold and oil;

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