Weekly Outlook of Financial Markets for July 16-20

The recent publication of the minutes of the FOMC meeting didn’t help rally commodities during last week. On the other hand, there were many talks over the possibility of a stimulus plan in U.S and China, especially after the publication of low growth rate of China’s GDP Q2 2012. This may have contributed to the rally of oil, gold and silver during last week. Will commodities prices continue to rise during the upcoming week? There are several important publications and speeches that may affect the financial markets this upcoming week including: U.S retail sales, minutes of the recent MPC meeting, Great Britain net borrowing, U.S existing home sales, Philly Fed index, Bernanke’s testimony, Governor King speaks, U.S Housing starts and U.S. jobless claims. Here is an economic news calendar forecast for July 16th to July 20th referring to the U.S., EU, Canada, China, Australia and Great Britain.   

(All times GMT):

Monday, July 16th

10:00 – Euro Area Annual Inflation (June): the inflation in Euro Area reached 2.4% in June (flash report), i.e. it continued to fall. If the upcoming inflation rate estimate will confirm the flash report’s growth rate, it might help raise the chances of another ECB interest rate reduction in the near future;

13:30 –U.S. Retail Sales Report: this report will present the monthly changes in the retail sales and food services for June 2012; in the recent report regarding May, the retail sales edged down by 0.2% from the previous month; gasoline stations sales decreased by 2.2% in May compared to April; this report could signal the changes in U.S’s gasoline demand and thus may affect crude oil prices;

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

Tuesday, July 17th

09:30 – Great Britain CPI: this report will refer to the yearly rate of GB’s consumer price index as of June 2012; some expect the June inflation will decline; in the recent report regarding May the annual CPI decreased from 3.0% to 2.8%; this news may affect the British pound;

10:00 –German ZEW economic sentiment: The upcoming publication will pertain to the ZEW indicator of economic sentiment for Germany for July. During June the ZEW indicator for Germany declined by 27.7 points to -16.9 points; as Germany’s economy is progressing, the Euro will plausibly remain robust against other currencies;

10:00 –Governor King speaks: The governor of Bank of England will give a speech; in his speech he could offer some perceptive behind the recent MPC interest rate decision and monetary policy; this speech may affect British Pound traders;

13:30 –U.S Core Consumer Price Index: This monthly report will pertain to the main changes in the core consumer price index for June 2012. According to the U.S Bureau of Labor statistics during May, the core CPI edged up by 0.2%(M-o-M) and the index increased over the last 12 months by 2.3%; the CPI declined last month by 0.3%;

14:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will publish its decision regarding the overnight interest rate, which remained flat at 1% in the previous decision. The BOC may continue its policy and keep the interest rate flat;

15:00 – Bernanke’s Testimony: This might be the main event of the week. Following the recent publication of the minutes of the FOMC meeting, if Bernanke will hint of another stimulus plan it could rally the commodities markets. 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 speech is “Semiannual Monetary Policy Report to the Congress“;    

Wednesday, July 18th

09:30 – MPC Meeting Minutes: in the recent MPC meeting it was announced the rate will remain flat at 0.5% but the asset purchase program increased by £50 to £375 billion; this decision came despite the concerns the MPC has had about inflation. The minutes of the recent meeting might offer some insight behind this decision;

13:30 – U.S. Housing Starts: the U.S Census Bureau will publish the U.S housing starts update for June 2012; this report was historically correlated with gold price – as housing starts decreased, gold prices tended to rise the following day (even when controlling to the U.S dollar effect); in the previous report, the adjusted annual rate reached 708,000 in May 2012, which was 4.8% below April’s  rate;

13:30 – U.S. Building Permits: The recent report building permits rose by 7.9% (M-o-M) in the adjusted annual rate of building permits and reached 780,000 in May 2012. If this report will continue to show growth in the building permits rate, it may indicate that the U.S housing market (from this aspect) is progressing (the recent U.S building permits and housing starts review);

15:30 – Bank of Canada’s Monetary Policy and Press Conference (at 16:15): The Bank of Canada will publish its monetary policy report and also hold up a press conference; if there will be big headlines in this press conference it could affect the Canadian dollar;

15:00 – Bernanke’s Testimony: This will be a testimony of the same title as a day earlier, before Committee on Financial Services in the U.S. House of Representatives;    

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 July 13th; in the recent weekly report for July 6th, stockpiles rose by 2.9 million bl to 1,797 million bl;

Thursday, July 19th

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 July 13th; in the latest report the jobless claims declined by 26k to 350,000; this upcoming weekly report may affect the U.S dollar and consequently commodities prices;

15:00 – Philly Fed Manufacturing Index: This monthly survey shows an estimate for the developments of the US economy; the survey measures the manufacturing conditions. In the previous June survey, the growth rate fell from -5.8 in May to -16.6 in June 2012. If this trend will continue this index may adversely affect not only U.S Dollar but also American stock indexes, and commodities prices (the recent Philly Fed review);

15:00 – U.S. Existing Home Sales: This report will refer to the changes in U.S. existing home sales for May 2012; in the previous report regarding May 2012 the number of homes sold decreased: the seasonally adjusted annual rate of 4.55 million home sales – a 1.5% decrease; if this trend will continue it may curb the rally the U.S dollar;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will pertain to the recent developments in natural gas production, storage, consumption and price as of July 13th; in the previous report, natural gas storage increased by 33 Bcf to 3,135 Bcf;

Friday July 20th

09:30 – Great Britain Net borrowing: this report will show the monthly developments in the public sector net borrowing for June 2012; as of May 2012, the net borrowing reached to £15.6 billion;

13:00 – Canada’s Core CPI: This report will refer to the core consumer price index for June 2012 and controlling the volatile components such as energy, fruit and vegetables. According to the Canadian CPI report for May 2012, the CPI rose by 1.2% during the past 12 month up to May – this is a slightly lower rate than in April. This report might affect the Canadian dollar, which is also strongly linked with commodities prices;

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