Weekly Outlook for September 5-9

The second week of September will bring to the table many decisions and news items that could affect not only the forex market, but also the stock market commodities market. These news items and decisions include: the ECB rate decision, US and Canada trade balance reports, Canadian housing starts, Japan’s rate decision, China’s inflation rate and U.S. non-Manufacturing PMI report. Here is an economic news calendar for the week of September 5th to September 9th that highlights the main news items and reports related to U.S, Euro Area, Japan, Australia, China and Canada.   

(all times GMT):

  1. Tuesday 6th of September 15.00 – U.S. ISM Non-Manufacturing PMI: This report will show the changes of non-manufacturing sector during August 2011. During July this index continued to grow with 52.7%, but it was a lower rate than in May that reached back then 53.3% (see here last report).
  2. Tuesday 6th of September tentative – Bank of Japan – rate decision and monetary policy statement: This statement will present Bank of Japan’s rate decision and other monetary related decisions. In the last statement the bank kept the interest rate at 0 to 0.1 percent. Furthermore, in the last report, BOJ enhanced its stimulus plan and raised the amount of financial assets purchases from 10 trillion yen ($130 billion) to 15 trillion yen ($194 billion). These actions are likely to further weaken the yen against major currencies including US dollar. The upcoming statement could offer some insight to the economic progress of Japan following the tsunami attack back in March 2011. Japan is among the leading countries in importing commodities such as gold, crude oil and natural gas;
  3. Tuesday 6th of September 2.30 – Australian GDP second quarter 2011: This quarterly report will show the change in Australia’s GDP growth rate in the second quarter 2011 compared with the first quarter of 2011. In the last report regarding Q1 2011, the GDP contracted by 1.2% in annual terms (seasonally adjusted); most of the drop came from the 2.4% drop in net exports during the quarter. Australia is among the leading non-OPEC countries in exporting crude oil and this report could offer some insight to the strength of Australian economy and consequently affect its currency (see here last report);
  4. Tuesday 6th of September 5:30 – Reserve Bank of Australia – cash rate decision statement: the overnight money market interest rate of Australia’s Reserve Bank was left unchanged at 4.75% since November 2010. Australia’s inflation rate remains near the Bank’s target inflation, and the labor force didn’t change much as the unemployment rate near 5%; this statement will present the Bank’s analysis for the keeping the rate unchanged (see here previous report);
  5. Wednesday 7th of September 14.00 – Canada overnight rate: The Bank of Canada will publish its decision regarding the overnight interest rate, which remained unchanged at 1% as of last month. The BOC may keep the rate unchanged, despite the slight increase in inflation rate to 2.7% (in annul terms). This decision could affect the CAD/USD; there are strong correlations among the Canadian dollar and major commodities that export including crude oil and gold;
  6. Wednesday 7th of September 15:30 – EIA report about Crude oil inventories: the EIA (Energy Information Administration) will publish its weekly report on the U.S Petroleum market for the week ending on September 2nd; last week the US oil stockpiles slightly decreased last week by 380 thousand barrels and reached 1,794.1 million barrels (see here the recent crude oil market review);
  7. Wednesday 7th of September 2:30 – Australia rate of unemployment: in the recent report regarding July 2011 the rate of unemployment slightly inclined to 5.1%; the number of unemployed rose by 18,000 people; the number of employed nearly didn’t change during July compared with June’s to reach 11,450 thousand. If this trend ill continue to could further weaken the Australian dollar (see here the recent report);
  8. Thursday 8th of September 13.30 – Canada building permits: during June the total value of the building permits inclined by 2.1% to $6.6 billion compared with May. This measure fluctuates very sharply from month to month. If this measurement will continue to rise in the upcoming report regarding July, this may further strengthen the Canadian dollar (see here previous report).
  9. Thursday 8th of September 13.30 – Report on American Trade balance: This monthly report will show the changes in imports and exports of goods and services to and from the US, including major commodities such as crude oil during July 2011; The American trade balance report for June 2011 showed the goods deficit increased by $2.1 billion compared with May 2011 and reached $67.6 billion; the service surplus fell by $0.1 billion to $14.5 billion; as a result, the goods and services deficit increased during the month by $2.3 billion to $53.1 billion;
  10. Thursday 8th of September 13.30 –Canadian Trade balance: In the August report regarding June 2011, imports and exports fell during the month: exports decreased by 1.7%, and imports dropped by 0.21%; as a result, the trade deficit widen from $1 billion in May to $1.6 billion in June; exports of energy products fell by 5.1%, to $8.7 billion, while exports of industrial goods and materials rose by 0.9% to $9.5 billion;
  11. Thursday 8th of September 13:30 – ECB conference Trichet speaks and Euro rate decision:  last month ECB left the interest rate unchanged at 1.5%. According to the recent Euro Area inflation rate report, the rate slightly slipped to 2.5% (annual terms) in July, but the Euro Area Q2 2011 GDP  grew by only 0.2%. Jean Claude Trichet, President of the European Central Bank, will need to consider these factors for the upcoming ECB rate decision. The debt crisis in Europe is also a key factor to consider for this decision. Therefore, there are pressures to lower the ECB interest rate; however, changing the direction of the ECB monetary policy from raising rates to lowering them won’t be something Trichet will easily do. In any case, if ECB will lower rates (low chance) or keep them unchanged (high chance), it is likely to lower the Euros to US dollar exchange rate, and thus may curb some of the gain in gold prices;
  12. Thursday 8th of September 13:30 – Department of Labor report – U.S. unemployment claims: For the week ending on August 27th, initial claims decreased by 12,000 to 409,000 claims; the insured unemployment rate remained unchanged at 3.0% for the week ending on August 20th; the number of insured unemployment was 3.735 million, a decrease of 18,000 compared with the previous week’s (see here my recent review on the US Labor market);
  13. Thursday 8th of September 15:30 – EIA report about Natural gas storage: Hurricane Irene eased some of the demand for natural gas in the electric sectors, but the recent additional weather disruptions may have damaged some of natural gas infrastructure. The EIA will publish its U.S. natural gas stocks, production and consumption report for the week ending on September 2nd. In the recent report, natural gas storage rose by 1.9% or by 55 Bcf to 2,961 billion cubic feet for all lower 48 states; the natural gas storage is still 2% below the 5-year average (see here my recent natural gas storage review);
  14. Thursday 8th of September 3.00 – Chinese CPI: in July, the Chinese inflation rate slightly inclined compared with June’s CPI and reached an annual rate of 6.5% (it was 6.4% in June); this figure is still above the China’s inflation target of 4% in annual terms. It could induce the People Bank of China’s to further try and curb the rising prices; In July the PBC raised its interest rate for the fourth time in 2011;
  15. Friday 9th of September 12:00 – Canada unemployment rate and employment report: In the previous employment report for July 2011, employment slightly inclined; the main increases were in the construction sector with 31,000 gains, and transportation and warehousing with 28,000 increases. The unemployment rate slipped by 0.2 percent points to 7.2%. If this report will continue show an ongoing improvement in the labor report in Canada in August, this might further strengthen the Canadian dollar and consequently might influence the prices of major commodities that Canada export including crude oil and natural gas prices (see here previous report);
  16. Friday 9th of September 13:15 – Canadian Housing Starts: The upcoming report is regarding August 2011. In the recent July 2011 report, the seasonally adjusted housing starts reached 205,100 units, which is higher than the 196,600 units started during June 2011. This report indicates not only the progress of the Canadian real estate market, but also of the Canadian economy; if the upcoming report will continue show growth, it may further strengthen the Canadian dollar (see here last report).

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