Major commodities prices including oil, gold and silver continued to trade down during last week; major currencies pairs including the Euro and Canadian dollar also decrepitated against the USD during last week. Will commodities prices continue to decline next week? In the upcoming week several reports, events and testimonies may affect the financial markets. These include: U.S new home sales, core durable goods, second GDP fourth quarter estimate, Canada’s GDP, German consumer climate, Italian Parliamentary Election, Bernanke testifies, U.S, China and GB manufacturing PMI, EU monetary developments, German retail sales, ECB President speech and U.S. jobless claims. Here is an economic outlook for the week of February 25th to March 1st regarding the U.S, Euro Area, China, Canada, and Great Britain.
(All times GMT):
Monday, February 25th
02:45 – flash China Manufacturing PMI: this index will be based on a survey of 800 companies in 20 industries in China; as of the previous the HSBC Manufacturing PMI survey regarding January 2013 the Manufacturing PMI rose again to 51.9; this index indicates the shifts in China’s manufacturing sectors growth rate; if the index will continue to increase, this may positively affect commodities prices;
Italian Parliamentary Election: The elections could change the political climate; it may also affect the stability of Italy. The results of these elections could affect the path of the Euro;
Tuesday, February 26th
15:00 – U.S Consumer Confidence: based to the recent monthly report, the consumer confidence index fell in December to 58.6 (M-o-M). The current expectations are that the January index may continue to fall; this report might affect commodities prices including the oil and natural gas rates;
15:00 – Bernanke’s Testimony: This testimony might be the main event of the week. Following the recent publication of the minutes of the January FOMC meeting, if Bernanke will hint of the future plans of the FOMC vis-à-vis the QE3 and the timeframe the Fed might consider putting on it, this news could pull down commodities rates. The Chairman of the Federal Reserve will testify before the Committee on Banking, Housing, and Urban Affairs in the U.S Senate. The title of the testimony is “Semiannual Monetary Policy Report to the Congress“;
15:00 – U.S. New Home Sales: This report will pertain to January 2013; in the latest report (for December), the sales of new homes rose to an annual rate of 369,000 – a 7.3% drop (month over month); if the number of home sales will further fall, it may indicate a sign of a slowdown in the recovery in the U.S real estate market which may also affect the direction of the USD.
Wednesday, February 27th
07:00 – German Consumer Climate: Gfk group will publish its German consumer climate index. If this report will continue to present a rise, it might pull up the Euro;
08:00 – KOF Economic Barometer: this report provides an estimate to the Swiss economy in the months to come;
09:00 – Euro Area Monetary Development: This monthly update will pertain to the shifts of the M3, M1 and loans to private sector in the Euro area during January 2013. In the recent December report, the annual growth rate for M3 fell to 3.3%; M1 also declined to 6.2%. Finally, the annual growth rate of loans to private sector slipped at -0.7%. This news suggests the EU economy is contracting; if this trend will continue it may adversely affects the Euro/USD and consequently commodities;
09:30 – Second GB GDP Q4 2012: This report will show the second estimate of the quarterly growth rate of the Great Britain economy during the fourth quarter of 2012; in the third quarter the British economy expanded by 1% (Q-2-Q);
Tentative – Italian 10 Year Bond Auction: the Italian government will issue its monthly with bond auction; in the recent bond auction, which was held at the last week of January, the average rate reached 4.17% – the lowest rate in recent months;
13:30 – U.S Core Durable Goods: This report will pertain to the developments in U.S. orders of durable goods in the manufacturing sector for January 2013. This report may indirectly indicate the developments in U.S. demand for commodities such as oil. As of December 2012, new orders of manufactured durable goods increased to $230.7 billion; if this report will present another rise in new orders then it could help pull up not only the USD but also commodities prices;
15:00 – Bernanke’s Testimony: Bernanke will give another testimony this time before the Before the Committee on Financial Services, U.S. House of Representatives. The title of the speech is “Semiannual Monetary Policy Report to the Congress“;
15:00 – U.S. Pending Home Sales: This report shows the developments in pending home sales in the U.S. for January; in the recent report, the pending home sales index decreased by 4.3% (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;
15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on February 22nd; in the recent update for February 15th, stockpiles declined again by 1.2 ml bl to reach 1,790.6 ml bl.
17:30 – ECB President Speaks: Mario Draghi will give a speech in the Katholische Akademie, in Bayern. If Draghi will provide some insight behind the future plans of the ECB monetary policy or change his projection regarding the progress of the EU economy, the testimony could affect the path of the Euro;
00:30 – Australia Private New Capital Expenditure: This quarterly report shows the changes in the private new capital expenditures and expected expenditures for the fourth quarter of 2012. As of the latest quarter, the seasonal adjusted total of new capital expenditure increased by 2.8% (Q-o-Q) and by 14.2% compared to the previous quarter in 2011. If this upward trend continues, it may positively affect the Aussie dollar, which tends to be strongly correlated with major commodities;
Thursday, February 28th
10:00 – Euro Area CPI: based on the latest report the annual CPI remained unchanged at 2.2%, which is slightly higher than ECB’s target inflation; if the inflation will decline, it could raise the odds of ECB lowering its cash rate in the near future;
13:30 – Second U.S GDP 4Q 2012 Estimate: This will be the second estimate of U.S’s fourth quarter 2012 real GDP growth. In the previous estimate the U.S GDP contracted by 0.1% in the fourth quarter; in the third quarter the GDP expanded by 2.7%; in the 2Q2012 the GDP growth rate reached 1.7% (annual rate). This presents a drop in the growth rate for the US’s GDP. If there will be a sharp shift in the growth rate from first to the second Q4 estimate, this could affect not only the US dollar but also commodities prices.
13:30 – U.S. Jobless Claims Weekly Report: this weekly report will refer to the shifts in the initial jobless claims for the week ending on February 22nd; in the recent report the jobless claims rose by 20k to reach 362k; this upcoming weekly report 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 of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and rates as of February 22nd; in previous weekly report, natural gas storage fell by 127 Bcf to 2,400 Bcf;
02:00 – China Manufacturing PMI: According the recent report regarding January 2013 the Manufacturing PMI inched down to 50.4; this means that China’s manufacturing sectors is expanding at a slightly slower pace. If this forthcoming report will present growth, it could signal an improvement in China’s economy. If the index will increase, this may also positively affect commodities rates;
Friday, March 1st
08:00 – German Retail Sales: This monthly report will present the changes in German retail sales during February. In January 2013, retail sales declined by 1.7% – lower than many had anticipated; if this report will drop again then it might weakened the Euro;
09:30 – GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector in January 2013. In the latest report regarding December 2012 the index declined to 50.8. This rate means the manufacturing sector is expanding at a moderately slower pace; this index might affect GB Pound;
10:00 – Euro Area unemployment rate: the rate of unemployment of the Euro Area edged down by 0.1 pp to 11.7% in October. This mean there the unemployment remained stable and high. If in the upcoming report this trend will continue, it may adversely affect the Euro;
13:30 – Canada’s GDP by Industry: the upcoming report will present the developments in major industrial sectors during December 2012. In the recent report regarding November 2012, the real gross domestic product rose again by 0.3%. This report may affect the path of the Canadian dollar, which is strongly correlated with major commodities;
15:00 – U.S. Manufacturing PMI: This update will refer to the monthly developments in the national manufacturing sector for February 2013. During January 2013 the index rose to 53.3%, which means the manufacturing is growing; this index may affect foreign exchange rates, crude oil and natural gas markets.
15:00 – Bernanke’s Speech: Chairman of the Federal Reserve Bernanke will give a speech At the 2013 Banking Outlook Conference, Federal Reserve Bank of Atlanta in Atlanta, Georgia. The title of his speech is “Financial Institutions and Reputational Risk”.
For further reading:
- Gold and Silver Outlook for February
- Gold and Silver Yearly Outlook For 2013
- QE3 Is Here, So Why Gold isn’t Pulling Up?
- Will Gold Producers Continue Their Recovery?