Weekly Outlook of Financial Markets for November 19-23

During last week, major commodities prices shifted with unclear trend; this includes commodities such as oil, silver and gold. The low volatility in the commodities markets during last week might continue this week as it will be a short one (Thanksgiving week). The main events of the week will revolve around the EU Summit and the decision regarding Greece’s bailout package, Bernanke’s speech, and BOJ monetary policy meeting. There are several publications, speeches and events that may influence investors and traders during this upcoming short week. These include: Euro-group meeting, housing starts and building permits, U.S existing home sales, Bernanke’s speech, RBA minutes of recent monetary policy meeting, China’s flash manufacturing PMI, BOJ rate decision, Spain’s bond sales, German flash manufacturing PMI, and U.S. jobless claims. Here is an economic news calendar projection for November 19th to November 23rd regarding the U.S, Canada, China, Australia Japan, Great Britain and EU.   

(All times GMT):

Monday, November 19th

15:00 – U.S. Existing Home Sales: This report will refer to the shifts in U.S. existing home sales for October 2012; in the recent report regarding September 2012 the number of homes sold declined: the seasonally adjusted annual rate declined to 4.75 million home sales; if this trend will continue it may pull back the U.S dollar.

00:30 – Minutes of Australia’s Bank Monetary Policy Meeting: The minutes of the previous monetary policy meeting of the Reserve Bank of Australia will be published. It may reveal the main factors that affected the board’s decision to leave the basic interest rate at 3.25%; the minutes of this meeting may affect the Australian dollar exchange rate and consequently commodities rates including oil and gold;

Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement: Bank of Japan will decide on its interest rate and monetary policy for December. Up to date, BOJ left the interest rate unchanged at 0 to 0.1 percent, and hasn’t expanded its stimulus plan. If the BOJ will introduce a new monetary stimulus plan it could affect the Yen, other currencies and commodities prices;

Tuesday, November 20th

07:00 –Bank of Australia Governor Stevens speaks: Following the recent rate decision, Governor Stevens of Bank of Australia will publicly speak; if the speech will reveal the future plans of the Bank vis-à-vis its monetary policy and the Bank’s future steps it could influence the Aussie, which is strongly linked with commodities prices;

All Day – Euro-group Meeting: The Euro-group Meeting will convene in Brussels as the EU leaders will decide on the Greek bailout plan. Following last week’s meeting, the EU ministers of finance had decided to make the decision regarding Greece’s next bailout package; if the EU will decide to make this bailout, which many expect will take place, then this may pull up a bit the Euro/USD;

13:30 – U.S. Housing Starts: the U.S Census Bureau will come out with its U.S housing starts report for October 2012; this report was historically linked with gold price – as housing starts rise, gold prices tended to fall the next day (even when controlling to the U.S dollar effect); in the previous report, the adjusted annual rate reached 872,000 in September 2012, which was 15% above August’s rate;

13:30 – U.S. Building Permits: The latest report building permits also hiked during September by 1% (M-o-M) in the adjusted annual rate of building permits and reached 894,000. If this report will continue to rise in the building permits rate, it may indicate that the U.S housing market (from this aspect) is pulling up (the recent U.S building permits update);

17:15 – Bernanke’s Speech: In anticipation for the government tackling the fiscal cliff by the end of the year, many will look towards Bernanke’s speech that could offer some insight behind the Fed’s future monetary steps. The Chairman of the Federal Reserve will talk at the Economic Club of New York. The title of the speech is “The Economic Recovery and Economic Policy “;

23:50 – Japanese Trade balance: The Japanese trade balance deficit for September 2012 rose by 112.2% compared to August’s, and reach 980 billion YEN (roughly $12.25 billion) deficit (seasonally adjusted figures). This rise is due to the hike in imports by 10%, and a modest gain in exports by 0.9%. Japan is among the leading importing countries of commodities, including crude oil and gold; its trade balance could provide some insight about Japan’s developments in demand goods and services;

Wednesday, November 21st

09:30 – Minutes of MPC Meeting: in the recent MPC meeting it was announced the rate will continue to be 0.5% and the asset purchase program at £375 billion; the MPC still has concerns regarding GB’s inflation. The minutes of the recent meeting might offer some information behind this decision;

09:30 – Great Britain Net borrowing: this report will refer to the monthly developments in the public sector net borrowing for September 2012; as of August 2012, the net borrowing was £10.7 billion;

Tentative – German 10 Year Bond Auction: the German government will issue its monthly bond auction; in the recent bond auction, which was held at the end of October, the average rate rose to 1.56%;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will be publish its weekly analysis on the U.S oil and petroleum stockpiles for the week ending on November 16th; in the latest weekly update for November 9th, stockpiles declined by 4.7 ml bl to reach 1,789.2 ml bl;

02:45– China flash Manufacturing PMI: this index will cover 800 companies in 20 industries in China; based on the HSBC Manufacturing PMI report regarding October 2012 the Manufacturing PMI rose to 49.1, which means the manufacturing sectors are still contracting; this index indicates the developments in China’s manufacturing sectors growth rate; if the index will increase, this may positively affect commodities prices;

Thursday, November 22nd

08:30 – Flash German, French and Euro Area Manufacturing PMI: In the recent update regarding October 2012, the German PMI declined to 45.7 i.e. the manufacturing conditions are contracting at a slightly faster rate. This report serves as an indicator to the economic development of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD and consequently commodities prices;

All Day – European Economic Summit Meeting (first day meeting): In the European Council Meeting the EU ministers of finance will talk about the recent monetary developments in Europe; this could include Greece’s debt problems, Spain’s current economic climate and other economic issues;

Tentative – Spanish 10 Year Bond Auction: the Spanish government will issue its monthly bond auction; in the recent bond auction, which was held during the third week of October, the average rate reached 5.46% – the lowest rate in previous months;

13:30 – U.S. Jobless Claims Weekly Report:  this report will refer to the weekly shifts in the initial jobless claims for the week ending on November 16th; in the previous report the jobless claims rose by 78k to  reach 439k; this upcoming weekly report may affect the U.S dollar and consequently the direction of 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 developments in natural gas production, storage, consumption and rates as of November 16th; in the previous weekly update, natural gas storage declined by 18 Bcf to 3,911 Bcf;

Friday, November 23rd

All Day – European Economic Summit Meeting (second day meeting): In the European Council Meeting the EU ministers of finance will talk about the recent monetary developments in Europe; this could include Greece’s debt problems, Spain’s current economic climate and other economic issues;

09:00 – German Business Climate Survey: This survey examines the changes (on a monthly basis) of the business climate of Germany. In the recent report for October 2012, the business climate index declined from 101.4 in September to 100 in October; if this trend will continue, it might adversely affect the Euro;

13:00 – Canada’s CPI: This report will pertain to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for October 2012. According to the Canadian CPI report for September 2012, the CPI rose by 0.2% during the month – this is a slightly lower rate than in August. This report might affect the Canadian dollar, which is also strongly correlated with commodities rates;

For further reading: