Weekly Outlook of Financial Markets for July 22-26

The summer days may have pulled back the volatility in the financial markets as leading commodities such as oil, natural gas and gold didn’t do much during last week. Leading currencies including Euro, Japanese yen and Aussie dollar rallied against the USD last week. The Japanese elections started off the week as Abe’s Liberal Democratic Party is set to win. This news could affect the Japanese yen and consequently other leading currencies. This forthcoming week several reports, may affect the financial markets. These include: U.S core durable goods, EU monetary developments, U.S housing starts, Australia’s CPI for the second quarter of 2013, Canada’s retail sales, China, EU and Germany’s manufacturing PMI, GB GDP for the second quarter of 2013, U.S existing home sales, and U.S. jobless claims.  Here is an economic outlook for the week of July 22nd to July 26th regarding the U.S, Euro Area, Canada, Japan, China, Australia, and Great Britain.   

(All times GMT):

Monday, July 22nd

15:00 – U.S. Existing Home Sales: This report will pertain to the developments in U.S. existing home sales during June 2013; in the latest report regarding May 2013 the number of homes sold rose to a seasonally adjusted annual rate of 5.18 million houses; if this trend will continue, it might pressure up the U.S dollar;

Tuesday, July 23rd

13:30 – Canada Retails Sales (May 2013): This report will refer to the retails sales in Canada as of May. In the recent report regarding April 2013, retails sales inched down by 0.3%;

00:30 – Australia’s CPI for Q2 2013: This quarterly report will refer to the changes in the consumer price index. In the previous report regarding the first quarter of 2013, the CPI rose by 0.4% compared to the fourth quarter and by 2.5% compared to Q1 2012; this report could affect the Aussie dollar which is linked with commodities rates;

02:45 – China flash Manufacturing PMI: this index is based on a survey covering 800 companies in 20 industries in China; in the previous HSBC Manufacturing PMI survey regarding June 2013 the Manufacturing PMI declined again to 48.3; this index indicates China’s manufacturing sectors have contracted at a slightly faster pace than in May; if the index will continue to contract, this may adversely affect commodities and risk related currencies such as Aussie dollar;

Wednesday, July 24th

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding June 2013, the German PMI inched down to 48.7 i.e. the manufacturing conditions are shrinking at a slightly faster pace. This report serves as an indicator to the economic changes of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities;

15:00 – U.S. New Home Sales: This report will refer to June 2013; in the recent report (opens pdf; for May), the sales of new homes slightly rose to an annual rate of 476,000 – a 4.8% gain (month over month); if the number of home sales will continue to rise, it may suggest the housing market in the U.S continues to progress; this news may also affect the US dollar;

15:30 – U.S Crude Oil Stockpiles Weekly Update: 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 July 19th; in the recent report for July 12th, stockpiles slightly decreased by 0.2 ml bl to reach 1,817.9 ml bl.

Thursday, July 25th

08:00 – Spain’s unemployment Change: the rate of unemployment of the Spain rose again to 27.2%. This mean, the employment situation in Spain hasn’t improved. If in the upcoming report this trend will persist, it may adversely affect the Euro;

09:00 – German Ifo Business Climate Index: This index comprises the changes (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of July. In the recent report for June 2013, the business climate index rose from 105.7 in May to 105.9 in June; if this trend will continue, it might pull up the Euro;

09:00 – Euro Area Monetary Development: This monthly report will refer to the shifts of the M3, M1 and loans to private sector in the Euro area for June 2013. In the previous May report, the annual growth rate for M3 slipped to 2.9%; M1 decreased to 8.4%. Finally, the annual growth rate of loans to private sector reached -0.7%. This news suggests the EU inflation isn’t rising as loans continue to dwindle and the growth rate of M1 and M3 inch down. The progress of the EU monetary base is likely to affect the ECB rate decisions in the coming months;

09:30 – Flash GB GDP Q2 2013: This report will present the first estimate of the quarterly growth rate of the British economy for the second quarter of 2013; during the first quarter the GB economy expanded by 0.3% (Q-2-Q);  if the growth rate will rise, it could affect the monetary policy of Bank of England and also affect GB pound;

13:30 – U.S Core Durable Goods: This report will pertain to the developments in U.S. orders of durable goods in the manufacturing sector for June 2013. This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of May 2013, new orders of manufactured durable goods increased to $231 billion; if this report will show another rise in new orders then it could pull up not only the USD but also commodities rates;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will pertain to the shifts in the initial jobless claims for the week ending on July 13th; in the recent report the jobless claims declined by 24k to reach 334k; the next weekly report may affect the U.S dollar and consequently commodities markets;

15:30 – EIA U.S. Natural Gas Storage: the EIA weekly report of the U.S. natural gas market will refer to the latest shifts in natural gas production, storage, consumption and prices as of July 19th; in latest weekly report, natural gas storage increased again by 58 Bcf to 2,745 Bcf;

Friday, July 26th

14:55 – UoM Consumer Sentiment (revised): University of Michigan will come out with its revised consumer sentiment monthly update; this survey could offer an insight to recent developments in U.S consumers’ sentiment; based on the recent report, the sentiment index slipped to 84.1;

 

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