Weekly Outlook of Financial Markets for September 3-7

During last week, the prices of precious metals rallied mainly on the last day of the week following Ben Bernanke’s speech that rekindled the expectations of another QE program in the near future. I still think it’s too early to jump to the conclusion that the FOMC will launch QE3 in the near future. During last week, the Euro also traded up against the USD. Further, other commodities prices such as crude oil also increased. Will gold silver and Euro continue to trade up during this short week (it’s a American holiday on September 3rd)?  There are several important reports, speeches and decisions to be made that may affect the financial markets such as: Mario Draghi’s speech, U.S manufacturing PMI, MPC rate decision and purchase program, GB manufacturing PMI, German bond auction, U.S non-farm payroll report, China’s CPI, Canada’s rate decision, Australia’s GDP for Q2, ECB rate decision and U.S. jobless claims. Here is an economic news calendar forecast for September 3rd to September 7th regarding the U.S., GB, China, Australia, EU, and Canada.   

(All times GMT):

Monday, September 3rd

02:30 – Australian Retail Sales: This monthly report will refer to the developments in Australia’s retail sales report for July 2012. The retail sales (seasonally adjusted) rose by 1% in June; this news may affect the strength of the Aussie dollar;

14:00 – Spanish Flash Manufacturing PMI: This report will refer to the monthly developments in Spain’s manufacturing sector. According the previous report the index rose to 42.3%, which means the manufacturing is still contracting;

09:30 – GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector status in August 2012. In the recent report regarding July 2012 the index fell to 45.4%. This rate means the manufacturing sector is contracting at a faster pace; this index might affect GB Pound;

Tentative – ECB President Draghi Speaks: The President of the European Central Bank, Mario Draghi will give a speech at Brussels; there are expectations that the ECB will launch its bond purchase program in the near future, but the tension between the President of German Central Bank and Draghi regarding this program could impede its progress. If the ECB President will refer to this issue or the upcoming ECB rate decision, it could affect the Euro and commodities rates;

Tuesday, September 4th

05:30 – Reserve Bank of Australia – Cash Rate Statement: the overnight money market rate of Australia’s Reserve Bank remained flat at 3.5% – the lowest level since the end of 2009. If the RBA will decide to lower the rate this news may affect the Australian dollar that is strongly linked with commodities prices;

15:00 – U.S. ISM Manufacturing PMI: This report will pertain to the monthly changes in the manufacturing sector on a national level during August 2012. During July 2012 the index edged up to 49.8%, which means the manufacturing is still contracting; this index may affect forex, crude oil and natural gas markets;

2:30 – Australian GDP Second Quarter 2012: This quarterly report will pertain to the Australia’s GDP growth rate during the second quarter of 2012. In Q1 2012, the GDP expanded by 1.3% (seasonally adjusted). The slowdown in China’s growth might also adversely affect the growth of Australia’s GDP. Australia is among the leading countries in exporting commodities such as crude oil and metal ores; if the growth rate will dwindle it could affect the Australia dollar (see here last report);

Wednesday, September 5th

Tentative – German 10 Year Bond Auction: the German government will issue its first bond auction for September; in the previous bond auction, which was held at the beginning of August, the average yield reached 1.42%;

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 unchanged at 1% in the previous decision. The BOC may continue its policy and keep the interest rate unchanged;

02:30 – Australia Employment Report: in the recent report regarding July 2012 the rate of unemployment remained at 5.2%; the number of employed (seasonally adjusted) slightly rose by 14,000 people; the number of unemployed decreased by 2,500 during July compared with June‘s numbers. This report could affect the Australian dollar (see here the recent report);

Thursday, September 6th

12:00 – Great Britain Bank Rate & Asset Purchase Plan: Bank of England will announce its basic rate for September 2012 and of any changes in its asset purchase plan; as of August the BOE’s rate remained flat at 0.5% and the asset purchase plan also remained £375 billion;

12:45 – ECB Press Conference and Euro Rate Decision: In the July interest rate decision the President of ECB, Mario Draghi cut the EU interest rate by 0.25pp to 0.75%; in August the interest rate remained unchanged. Since many EU countries are still struggling, ECB might decide to make another rate cut in the near future by another 0.255pp. If ECB will cut the rate again, it may affect the Euro to US dollar exchange rate;

13:30 – U.S. Jobless Claims Weekly Report:  this update will pertain to the weekly changes in the initial jobless claims for the week ending on August 31st; in the latest report the jobless claims remained unchanged at 374,000; this upcoming weekly report may affect the U.S dollar and consequently the prices of commodities;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will present the developments in the non-manufacturing sector during August 2012. During July 2012 this index edged up to 52.6% – this means the non-manufacturing is still expanding and at a slightly faster pace than before; this index may affect forex and commodities trading;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will come out with its weekly report on the U.S oil and petroleum stockpiles for the week ending on August 31st; in the previous weekly update for August 24th, stockpiles increased by 4.6 million bl to 1,797 million bl;

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 changes in natural gas production, storage, consumption and prices as of August 31st; in the previous weekly report, natural gas storage rose by 66 Bcf to 3,374 Bcf;

2:30 – Australian Trade Balance: The upcoming report will refer to July 2012. In the recent report, the seasonally adjusted balance of goods and services nearly didn’t change and expanded by only $9 million in June 2012. The export of non-monetary gold rose by $246 million (17%); if the gold exports will continue to rise in July, it might suggest an increase in demand for non-monetary gold (see here last report);

Friday, September 7th

09:30 – Great Britain Manufacturing Production: this report will present the yearly rate of GB’s manufacturing production for July; in the last report regarding June the index declined by 2.9% (M-2-M); this news may affect the British Pound;

09:30 – Great Britain PPI Input: this report will refer to the yearly rate of GB’s producer price index as of August 2012; in the previous report regarding July the input price rose by 1.3% (M-2-M); this news may affect the British Pound;

13:30 – Canada’s Employment Report: In the recent employment report for July 2012, unemployment edged up to 7.3%; the employment fell by 30k during the month. The upcoming report might affect the Canadian dollar and consequently the prices of oil and natural gas (see here the recent report);

13:30 – U.S. Non-Farm Payroll Report: in the recent report for July 2012, the labor market expanded by a higher than expected rate: the number of non-farm payroll employment increased by 163k; the U.S unemployment rate reached 8.3%; if the upcoming report will continue to show growth of above 120 thousand (in additional jobs), this may lower the chances of the Fed introducing additional stimulus plan in 2012; this report may affect not only the U.S dollar, but also commodities prices (see here my last review on the U.S employment report);

Saturday, September 8th

02:30 – Chinese CPI: during July the Chinese inflation rate declined to an annual rate of 1.8%; this rate is well below China’s inflation target of 4% in annual terms. If the inflation will continue to dwindle it could indicate that China’s economic progress continues to slow down; China is among the leading countries in importing commodities such as gold and oil;

For further reading: