Weekly Outlook of Financial Markets for December 2-6

Last week’s slow pace in the financial markets won’t repeat next week, and many news items, decisions and reports will come to fruition. These include: U.S non-farm payroll report, ECB, RBA, BOC and BOE rate decisions, U.S, Canada, Australia and China’s trade balance, U.S GDP for the third quarter, Ben Bernanke will give a speech, U.S manufacturing production, Bank of Japan’s Kuroda Speaks, Canada’s employment report, U.S factory orders, OPEC Summit, and U.S. jobless claims.  Here is an economic forecast for the week of December 2nd to December 6th regarding the U.S, Australia, Canada, Euro Area, China, Japan, and Great Britain. 

(All times GMT):

Monday, December 2nd

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last update on its estimate for November’s PMI index. Last month’s Manufacturing PMI reached 50.9 – i.e. China’s manufacturing sectors is expanding at a faster pace than the previous month. If the updated PMI index remains elevated or even higher than expected, this will suggest China’s manufacturing conditions are growing;

Tentative – EU Economic Outlook:  This biyearly report will show of any changes to the EU’s two-year economic outlook;

Tentative – Bank of Japan’s Kuroda Speaks: Bank of Japan Governor will give a speech in Nagoya. Kuroda’s words could affect the Japanese yen;

08:15 – Spanish Manufacturing PMI: This report will refer to Spain’s manufacturing sector in November 2013. In the last update regarding October 2013 the index rose to 50.9. This rate gain means the manufacturing sector is growing at a slightly faster pace;

09:30 – GB Manufacturing PMI: During October, Great Britain’s manufacturing index slipped to 56. This rate drop means the manufacturing sector is still growing but at a slower rate; this index might affect GB Pound;

13:30 – Bernanke’s talk: Chairman of the Federal Reserve Ben Bernanke for the last month is expected to speak at the National College Fed Challenge, in WashingtonDC;

15:00 – U.S. Manufacturing PMI: This report will pertain to November 2013. In October, the index inched up again to 56.4% – the highest level in the past couple of years; this means the manufacturing is growing at a faster pace; this index may affect stock markets, USD, and crude oil and natural gas markets;

Tuesday, December 3rd

02:30 – Australian Retail Sales: This monthly update will refer to October 2013. In the recent report, the seasonally adjusted retail sales rose by 0.8% during September; 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 cut its cash rate was back in September. The current rate is set at 2.50% – its lowest level in years, which contributed to ongoing downfall of the Aussie dollar against leading currencies such as Euro and USD. The current expectations are that RBA will keep its cash rate flat in this upcoming rate decision;

09:30 – GB Construction PMI:Great Britain’s construction sector in October 2013 improved as the PMI increased to 59.4 – the construction sector is growing at a faster pace. The upcoming report will refer to November;

Wednesday, December 4th

02:30 – Australian GDP Third Quarter 2013: This quarterly report will refer to the Australia’s GDP growth rate for the third quarter of 2013. In the second quarter of 2013, the GDP grew by 0.6% (seasonally adjusted). Australia is among the leading countries in exporting commodities such as oil, LNG, and metal ores to big economies such as China and Japan; if the GDP growth rate will increase, it could positively affect the Australia dollar (see here last report);

All Day –OPEC Summit: This will be the second and last summit of the leaders of OPEC countries. In this summit, the leaders of OPEC will review the recent developments in the oil market, the current projections on supply and demand for 2014 and will decide on OPEC’s oil quota. The latest developments in Libya and Iran’s fractions with the West could affect the decision on OPEC’s oil quota;

09:30 – GB Services PMI: In the previous report, this index sharply increased to 62.5; this index may affect the British Pound’s direction;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will release its estimate for the next U.S non-farm payroll changes for November 2013 that will be published next week;

13:30 – Canadian Trade Balance: In the recent report regarding September 2013, exports rose by 1.8% and imports inched up by 0.2%; as a result, the trade balance’s deficit narrowed from $1.1 billion in August to $435 million in September; this report may affect the Canadian dollar, which tends to be correlated with commodities;

13:30 –American Trade Balance: This monthly update for October will show the changes in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the last American trade balance update regarding September the goods and services deficit expanded to $41.8 billion – its highest level since July;

15:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will announce of any changes to its overnight rate decision – the rate is currently at 1%. The BOC may maintain its interest rate; the economic developments in Canada might prompt BOC to eventually cut its rate;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to November 2013. In the previous report, this index rose to 55.4% – the non-manufacturing sector is growing at a faster rate compared to the previous month; this index may affect the US dollar;

15:00 – U.S. New Home Sales: This report will pertain to November 2013; in the recent report (opens pdf; for October), the sales of new homes sharply rose to an annual rate of 421,000 – a 6.8% rise (month-over-month); if the number of home sales keep rising, this may suggest the housing market in the U.S is reheating; this news may also affect the US dollar;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The Energy Information Administration will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on November 29th;

02:30 – Australian Trade Balance: The forthcoming update will refer to October. In the last update, for September, the seasonally adjusted balance of goods and services reached a $280 million deficit. The export of non-monetary gold decreased by $1 million; if gold exports change direction and rally, it might suggest a rise in demand for non-monetary gold (see here latest update);

Thursday, December 5th

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will come out with its basic rate for December 2013; the MPC will also state of any new developments to its asset purchase pogrom; as of November, BOE kept its interest rates at 0.5% and the asset purchase plan at £375 billion;

12:45 – ECB Rate Decision: ECB will announce its monetary policy and economic outlook as of December. The current expectations are that ECB will keep its cash rate unchanged especially since ECB cut its rate last month by 25pp to 0.25%. ECB President Mario Draghi may refer to the weak Euro and of any potential plans to introduce a new LTRO for banks that agree to use it for lending businesses;

13:30 – Second U.S GDP 3Q 2013 Estimate: This will be the second estimate of U.S’s third quarter 2013 real GDP growth. In the early estimate, the U.S GDP grew by 2.8% in the third quarter of 2013. If the growth rate in the second estimate falls from the first estimate, this could negatively impact not only the US dollar but also commodities prices;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly update will refer to the shifts in the initial jobless claims for the week ending on November 29th; in the last report the jobless claims declined by 10k to reach 316k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

15:00 – U.S Factory Orders: This report will refer to the changes in U.S. factory orders of manufactured durable goods during November; in the previous report factory orders increased by 1.7%; this report will offer some insight regarding the developments of the U.S economy;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will pertain to the latest changes in natural gas production, storage, consumption and prices as of November 29th;

Friday, December 6th

08:15 – Switzerland’s CPI: In the last update, the consumer price index slipped by 0.1%; if the CPI continues to fall, this may influence the Swiss National Bank’s monetary policy;

11:00 – German Factory Orders: The next report will refer to November 2013. In the last update, the factory orders bounced back and rose by 3.3% during October;

13:30 – Canada’s Employment Report: In the recent employment update for October 2013, unemployment remained unchanged at 6.9%; the employment grew by 13.2k during last month. The next report might affect the Canadian dollar and consequently commodities;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report for October 2013, the labor market improved: The number of non-farm payroll employment rose by 204k – higher than the number many had expected; the U.S unemployment rate edged up to 7.3%; the forthcoming employment report could show additional rise in jobs. If the employment exceed 150 thousand (in additional jobs), this may pressure further down gold and silver and positively affect the U.S dollar and U.S stock markets;

13:30 – U.S Personal spending: This monthly report will pertain to the changes in income and outlays in the U.S during October; in the last report regarding September the personal income slightly rose by 0.2%;

Tentative – China’s Trade Balance: Based on the recent monthly update, China’s trade balance rose to a $31.1 billion surplus; if the surplus further rises, it could indicate China’s economy is improving and thus may positively affect commodities rates;

Tentative – Bank of Japan’s Kuroda Speaks: Bank of Japan Governor will give a speech in Tokyo;

14:55 – UoM Consumer Sentiment (preliminary):University of Michigan will release its preliminary consumer sentiment monthly report; this survey could offer information regarding the latest changes in U.S consumers’ sentiment; According to the recent report, the sentiment index sharply fell to 72;

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