Weekly Outlook of Financial Markets for September 30- October 4

During last week, leading commodities prices mostly fell including natural gas, oil and silver; in the forex market, the USD appreciated against several risk currencies such as Aussie dollar and Canadian dollar. In the forthcoming week several reports and speeches may affect commodities, equities and forex markets; these include: U.S non-farm payroll report, Bernanke’s speech, BOJ monetary policy statement, Spain’s employment report, U.S manufacturing and non-manufacturing PMI, Australia’s trade balance, China’s manufacturing PMI, RBA and ECB’s cash rate decision, German retail sales, GB manufacturing PMI, and U.S. jobless claims. Here is a breakdown for the week of September 30th to October 4th regarding the U.S, Japan, Euro Area, China, Australia, Canada, and Great Britain.   

(All times GMT): 

Monday, September 30th

02:00 – China Manufacturing PMI (HSBC’s final estimate): This will be HSBC’s last estimate for September’s PMI index. Last month’s Manufacturing PMI reached 50.1 – i.e. China’s manufacturing sectors is moderately expanding; the recent flash PMI report rose to 51.2 in September – the highest level in five months. If the updated PMI index remains elevated or even higher than the flash index, this will suggest China’s manufacturing conditions are improving. Moreover, this shift could have a positive effect on the prices of commodities such as oil and gold;

07:00 – German Retail Sales: This monthly report will show the changes in German retail sales during August. In July 2013, retail sales decreased again by 1.4% – some analysts expected a rise in retail sales; if this report continues to show a decline in sales, it might further weakened the Euro;

09:30 – GB Net Lending to Individuals: This report will refer to Great Britain’s changes in net credit to consumers. In the previous update, net lending fell to 1.3 billion pounds; this report could provide some insight behind the latest changes in GB’s credit market conditions;

10:00 – EU CPI Flash Estimate: This index calculates the annual consumer price index of the Euro Area. Based on the last estimate, the annual CPI declined to 1.4%, which is also lower than the ECB’s target inflation of 2%. If the inflation rate continues to fall down, this could indicate the EU economy isn’t progressing. These developments could influence the ECB members with respect to ECB’s cash rate decision later this week;

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for July 2013. In the previous update regarding June 2013, the real gross domestic product fell by 0.5%. This report may affect the Canadian dollar, which is strongly correlated with major commodities prices;

Tuesday, October 1st

02:00 – China Manufacturing PMI: As of August, the Manufacturing PMI rose for third consecutive month to 51 – i.e. China’s manufacturing sectors are expanding at a slightly faster rate; in the previous flash PMI report, the index rose to 20.3. If in the upcoming report the PMI continues to pull up, it could signal growth in China’s manufacturing sectors, which could also positively affect commodities prices;

02:30 – Australian Retail Sales: This monthly update will pertain to August 2013. In the latest update, the seasonally adjusted retail sales inched up by 0.1% during July; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

05:30 – Reserve Bank of Australia – Cash Rate Statement: The last time the RBA lowered its cash rate was back in August. The current rate is set at 2.50% – its lowest level in recent years, which contributed to depreciation of the Australian dollar. The current expectations are that RBA will maintain its cash rate flat this time;

09:30 – GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector in September 2013. In the last update regarding August 2013 the index rose again to 57.2. This rate gain means the manufacturing sector is growing at a faster pace; this index might affect GB Pound;

10:00 – EU Unemployment Rate: Last month’s report showed the rate of unemployment remained unchanged at the high rate of 12.1%. If the rate of unemployment remains high, it could adversely affect the Euro;

15:00 – U.S. Manufacturing PMI: This report will pertain to September 2013. In August, the index slightly increased to 55.7%; this means the manufacturing is growing at a slightly faster rate; this index may affect stock markets, foreign exchange rates, and crude oil and natural gas markets;

Wednesday, October 2nd

02:30 – Australian Trade Balance: The upcoming report will refer to August. In the last update, for July, the seasonally adjusted balance of goods and services fell to a $765 million deficit. The export of non-monetary gold decreased by $219 million; if gold exports further fall, it might suggest a drop in demand for non-monetary gold (see here latest update);

08:00 – Spain’s unemployment Change: The number of people unemployed in Spain remained virtually unchanged in August. This mean, the employment situation in Spain hasn’t improved. If in the upcoming report the number of unemployed resume its downward trend, this may pressure up the Euro;

09:30 – GB Construction PMI:Great Britain’s construction sector in August 2013 improved again as the PMI sharply increased to 59.1 – the construction sector is progressing at a faster pace. The upcoming report will refer to September;

12:45 – ECB Rate Decision: ECB will announce of any developments in its monetary policy and economic outlook as of October. The current expectations are that ECB will leave its interest rate unchanged at 0.5%. ECB President Draghi will also refer to ECB’s forward looking analysis. If Draghi changes his tone from last month’s meeting, this press conference could stir up the forex market.   Moreover, if ECB surprises and reduces its cash rate, or cut further its deposit rate, the Euro is likely to take a dive, which may drag along with it commodities prices;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will publish its estimate for the next U.S non-farm payroll changes for September 2013 that will come out on Friday;

15:30 – U.S Crude Oil Stockpiles Weekly update: 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 September 27th; the report will also show changes in imports, refinery input and production, which could provide some insight behind the latest changes in the price of crude oil in the U.S; 

20:30 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give brief welcoming remarks at the Federal Reserve/Conference of State Bank Supervisors Community. If Bernanke were to refer to the Fed’s policy or the market’s reaction to the September FOMC meeting, this speech may stir up the financial markets;

Thursday, October 3rd

09:30 – GB Services PMI: In the previous report, this index increased to 60.5; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly update will refer to August 2013. In the previous update, volume of retail trade rose by 0.1% during July – lower rate than many had anticipated; this news may affect the Euro, which tends to be linked with commodities prices;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will pertain to the changes in the initial jobless claims for the week ending on September 27th; in the previous report the jobless claims decreased by 5k to reach 305k; this upcoming weekly report may affect the U.S dollar and consequently commodities and stocks markets;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to September 2013. In the latest update, this index increased again, for the third straight week, to 58.6% –  the non-manufacturing sector is augmenting at a faster rate compared to the previous month; this index may affect the US dollar;

15:00 – U.S Factory Orders: This report will refer the developments in U.S. factory orders of manufactured durable goods during September; in the previous report factory orders fell by 2.4%; this serves as another indicator for the progress of the U.S economy;

15:30 – EIA U.S. Natural Gas Storage Update: The EIA weekly report about the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and rates as of September 27th; in recent weekly update, natural gas storage rose by 87 Bcf to 3,386 Bcf;

Friday, October 4th

Tentative – Japan’s monetary policy meeting and press conference: In the forthcoming Japanese monetary policy meeting, BOJ members will decide on any shifts to the bank’s current asset purchase program. This decision may affect the Japanese yen;

13:30 – U.S. Non-Farm Payroll Report: in the latest employment report for August 2013, the labor market slightly expanded again: The number of non-farm payroll employment increased by 169k – lower than the number many had expected; the U.S unemployment rate inched down to 7.4%; if the employment increase again by over 150 thousand (in additional jobs), this may pull back down gold and silver and positively affect the U.S dollar and U.S stock markets;

15:00 – Canada’s Ivey PMI: This report presents the diffusion index based on surveyed purchasing managers; in the recent monthly update, the index rose to 51. The report might affect the Canadian dollar.

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