Weekly Outlook of Financial Markets for October 22-26

During last week, major commodities prices declined including oil, silver and gold. Several reports that may have affected forex and commodities prices: : the Philly Fed index rose again and turned positive fort he fist time since April; U.S jobless claims rose by 46k to 388k; housing starts hiked by 15% in September; U.S CPI rose by 0.6% during September. These news items didn’t seem to curb the fall in major commodities prices. Last week’s EU Summit didn’t ease the concerns of traders as Spain announced it won’t need a bailout for now. The main events of the week will shift back to the U.S and will include the penultimate FOMC meeting for 2012 and U.S third quarter GDP report. There are several other important publications, speeches and events that may affect the financial markets during this week. These include: U.S new home sales, BOC rate decision, China’s flash manufacturing PMI, U.S core curable goods, GB GDP for Q3, BOE Governor speech,  and U.S. jobless claims. Here is an economic news calendar projection for October 22nd to October 26th regarding the U.S., Great Britain, China, Australia, EU, and Canada.   

(All times GMT):

Monday, October 22nd

18:30 – FOMC member Pianalto’s Speech: the FOMC member will talk about U.S payment system;

Tuesday, October 23rd

13:30 –Retails Sales Canada (August 2012): This report will refer to the retails sales in Canada as of August. It may affect the direction of USD/CAD currency pairs, which is strongly correlated with commodities prices. In the previous report regarding July 2012, retails sales rose by 0.4%;

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

18:00 –Governor King speaks: The governor of Bank of England is due to give a speech at South Wales Chamber of Commerce, in Cardiff; in his speech he could offer some insight behind the recent MPC interest rate decision and monetary policy; this speech may influence British Pound traders;

02:45– China flash Manufacturing PMI: this index will cover 800 companies in 20 industries in China; based on the HSBC Manufacturing PMI update regarding September 2012 the Manufacturing PMI remained flat at 47.8; this index indicates the shifts in China’s manufacturing sectors growth rate; if the index will rise , this may positively affect commodities prices;

Wednesday, October 24th

Tentative – German 10 Year Bond Auction: the German government will issue another bond auction; in the recent bond auction, which was held at the last week of September, the average rate reached 1.52%;

08:30 – Flash German, French and Euro Area Manufacturing PMI: In the previous report regarding September 2012, the German PMI rose to 47.3 i.e. the manufacturing conditions are still contracting but at a slightly slower 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 currency pair and consequently also major commodities rates;

09:00 – German Business Climate Survey: This survey analyzes the developments (on a monthly basis) of the business climate of Germany. In the previous report for  September 2012, the business climate index declined from 102.3 in August to 101.4 in September; if this trend will continue, it might adversely affect the Euro;

14:00 – U.S. Flash Manufacturing PMI: This report will refer to the monthly shifts in the manufacturing sector on a national level for October 2012. During September 2012 the index rose to 51.5%, which means the manufacturing is expanding; this index may affect forex, crude oil and natural gas markets;

15:00 – U.S. New Home Sales: This report will refer to September 2012; in the previous report (for August), the sales of new homes declined to an annual rate of 373,000 – a 0.3% decline (month over month); if the number of home sales will change direction and rise, it may indicate a sign of some recovery in the U.S real estate market which may also affect the strength of the US dollar;

15:30 – Bank of Canada’s Monetary Policy and Press Conference: The Bank of Canada will come out with 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;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on October 19th; in the recent weekly update for October 12th, stockpiles declined again by 2.6 million bl to 1,789 ml bl;

19:15 – FOMC Meeting (Statement): The FOMC will convene for the seventh time this year and decide at the end of two day of session on any changes in its monetary policy and interest rate; Following last month’s FOMC meeting, in which the FOMC announced of the launch of QE3, it seems unlikely that the Fed will introduce additional stimulus plan. The Fed might, however, hint of any future plans to intervene again the U.S financial markets. The FOMC statement may affect the US dollar and precious metals prices; I guess that even if the FOMC won’t announce of additional monetary steps, but will only allude to its intention to do so in the near future, this news is likely to pull up gold and silver prices;

00:45 – ECB President Speaks: Mario Draghi will participate in a closed door meeting at the Deutsche Bundestag, in Berlin. Following last week’s EU Summit that resulted with no big headlines, perhaps in his speech he might refer to the future monetary steps of ECB and the actions that should be taken by the major economies in order to deal with the debt crisis. This speech might affect the Euro to US dollar exchange rate;

Thursday, October 25th

09:30 – Flash GB GDP Q3 2012: This report will show the first estimate of the quarterly growth rate of the British economy during the third quarter of 2012; during the second quarter the GB economy contracted by 0.7% (Q-2-Q);

13:30 – U.S Core Durable Goods: This report will refer to the developments in U.S. orders of durable goods in the manufacturing sector for September 2012. This report may indirectly indicate the changes in U.S. demand for commodities such as crude oil. As of August 2012, new orders of manufactured durable goods declined by $30.1 billion to $198.5 billion; if this report will continue to show a drop in orders then it could pull down not only the US dollar but also commodities prices;

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 October 20th; in the previous report the jobless claims rose by 46k to 388,000; this upcoming weekly update may affect the U.S dollar and consequently the prices of commodities;

15:00 – U.S. Pending Home Sales: This report refers to the developments in pending home sales in the U.S. for September; in the recent report the pending home sales index declined by 2.6% (M-over-M). These data are another indicator for the shifts in America’s real estate market; based on last week’s results on housing starts, the pending sales may change direction and rise. In such a case US dollar may rally;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and rates as of October 5th; in the previous weekly report, natural gas storage rose by 51 Bcf to 3,776 Bcf;

Friday, October 26th

07:00 – German Consumer Climate: Gfk group will publish its German consumer climate index. If this report will continue to be positive it might also positively affect on the Euro;

08:00 – KOF Economic Barometer: this report provide an outlook of the Swiss economy in the months to follow. According to the previous press release, the report predicted that the Swiss Economy is headed towards an expansion in 2012;

13:30 – First U.S GDP 3Q 2012 Estimate: This will be the first estimate of U.S’s third quarter 2012 real GDP growth. In the recent estimate the U.S GDP during the second quarter expanded by 1.7%; in the 1Q2012 the GDP growth rate reached 1.9% (annual rate). This shows a fall in the growth rate for the US’s GDP. If there will be a sharp shift in the growth rate from Q2 to Q3 this could affect not only the US dollar but also commodities prices.

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