Weekly Outlook of Financial Markets for July 8-12

Last week may have been a short one in the U.S but this didn’t stop the markets to heat up especially the U.S equities and crude oil prices that sharply rose. Conversely, silver and gold prices started off the week on a positive note only to tumble down by the end of the week following the release of the slightly better than expected non-farm payroll report. It should be noted that even though the total numbers were good, a closer look at the numbers reveal that most of the gain was in part time employees (322k jobs were added in June), and  the participation rate is down. So the U.S labor market might not be doing as well as we might think.  The ECB and BOE decided to leave the cash rate unchanged but the ECB president suggested he may keep rates low or even lower then in the near future. This news dragged down the Euro. This week several reports, decisions and events may affect the financial markets. These include: Euro Group Summits, ECB president speech, minutes of   the FOMC meeting, Bernanke’s speech, Germany’s industrial production, U.S PPI, BOJ monetary policy meeting and minutes of the last meeting, China’s new loans, Australia’s employment report, GB manufacturing production, Japan Current account, IEA monthly update, China’s CPI, OPEC monthly report, and U.S. jobless claims.  Here is an economic outlook for the week of July 8th to July 12th regarding the U.S, China, Euro Area, Japan, Australia, and Great Britain.   

(All times GMT):

Monday, July 8th

00:50 – Japan Current Account: this monthly report will present the developments in the difference between exports and imports for Japan during the previous month; this news may affect the direction of the Japanese Yen;

All Day – Euro-Group Summits: In this summit, the EU ministers of finance and Euro-Group President will gather in Brussels. They are expected to converse about the Greece’s economic situation in anticipation for the next bailout;

11:00 – German Industrial Production: The upcoming report will refer to June 2013. In the previous update, the industrial production rose by 1.8% during May;

13:30 – ECB President Speaks: Mario Draghi will testify in front of the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels. He will also testify on the EU economy at the quarterly hearing of this Committee. If Draghi will provide some insight behind the future steps of the ECB’s monetary policy, this testimony could affect the Euro;

Tuesday, July 9th

Tentative – China’s CPI: during May, the Chinese inflation rate slipped to an annual rate of 2.1%, which is lower than China’s target inflation. The low inflation is another indication for China’s economic slowdown. If the inflation will continue to slide, it could indicate that China’s economic progress is further cooling down;

09:30 – Great Britain Manufacturing Production: This update will present the annual rate of GB’s manufacturing production in May; in the previous report regarding April 2013 the index changed direction and fell by 0.2% (M-2-M); this news may affect the British Pound;

All Day – ECOFIN Summit: In this summit, the EU ministers of finance will focus on the economic developments in EU;

Wednesday, July 10th

00:50 – Japan’s monetary policy meeting minutes: The minutes of the last monetary policy meeting will be published. This report could offer some insight behind the future decisions of BOJ;

Tentative –China’s Trade Balance: According to the latest monthly report, China’s trade balance rose to a $20.4 billion surplus; if the surplus will further rise, it could indicate that China’s economic growth is picking up and thus may positively affect rates of commodities;

08:45 – French Industrial Production: This upcoming report will pertain to June’s figures. In the latest update, the industrial production changed direction and rose by 2.2% during May;

Tentative – OPEC Monthly Report: this monthly update will show the changes in crude oil and natural gas’s supply and demand worldwide during June 2013; this update will also refer to the changes in the production of OPEC countries during last month; this news may affect oil prices;

Tentative – U.S 10 Year Bond Auction: the U.S government will come out with its monthly bond auction; in the previous auction, which was held at the second week of June, the average rate reached 2.21% – much higher than the last auction;

15:30 – U.S Crude Oil Stockpiles Weekly Report: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on July 5th;

19:00 – Minutes of the last FOMC Meeting: Following the last FOMC meeting, in which the Fed left its monetary policy unchanged but Bernanke heavily hinted that the Fed may start taper QE3 by the end of the year; the upcoming minutes could shed some additional light behind the future plans of the Fed. If the minutes will further suggest the Fed is considering easing down the current asset purchase program in the coming months, this could pressure down gold and silver prices;

21:10 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give a speech at the National Bureau of Economic Research Conference. The title of his speech is “A Century of U.S. Central Banking: Goals, Frameworks, Accountability “. Following his recent press conference following the last FOMC meeting, the Chairman’s remarks might stir up the markets again;

Thursday, July 11th

Tentative –IEA Monthly Oil Report: the upcoming monthly report will show a revised (as of May) outlook and analysis for the global crude oil and natural gas market for 2013 and 2014;

Tentative – Japan’s monetary policy meeting and press conference:Japan’s monetary policy meeting will be held. BOJ members will decide on any changes to the bank’s current asset purchase program. These decisions could affect the Japanese yen;

Tentative – China New Loans: This report will refer to the recent changes in China’s new loans. Based on the recent update, the total loans rose again for the third consecutive month; this report is another indicator for China’s economic growth;

02:30 – Australia Employment Report: in the last report regarding May 2013 the rate of unemployment remained at 5.5%; the number of employed (seasonally adjusted) slightly rose by 1,100 people. This report could affect the Aussie dollar (see here the recent report);

09:00 – ECB Monthly Bulletin: This monthly report for June analyzes the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some perspective on the outlooks of the EU progress;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will refer to the changes in the initial jobless claims for the week ending on July 5th; in the last report the jobless claims fell by 5k to reach 343k; this upcoming weekly report may affect the U.S dollar and consequently commodities and equities markets;

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 developments in natural gas production, storage, consumption and rates as of July 5th; in recent weekly update, natural gas storage increased by 72 Bcf to 2,605 Bcf;

19:00 –U.S. Federal Budget Balance: this upcoming report will pertain to June 2013; this report indicates the government debt growth and thus may affect the U.S dollar. In the previous report regarding May the deficit rose by $138.7 billion; if the deficit will continue to expand, it could influence U.S policymakers to make additional cuts to the budget;

Friday, July 12th

13:30 – U.S. Producer Price Index: This report will show the developments in the PPI during June 2013, i.e. the inflation rate from the producers’ side. In the last report regarding May, this index for finished goods rose by 0.5% compared with April’s level and the core PPI by 0.1%; this news might affect commodities rates;

14:55 – UoM Consumer Sentiment (preliminary):University of Michigan will come out with its preliminary consumer sentiment monthly update; this survey could offer an insight to latest developments in U.S consumers’ sentiment; According to the recent update, the sentiment index slipped to 82.7.

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