Financial Market Outlook for June 20-24

Now that the Fed meeting concluded without any change to its policy all eyes will set on Britain and the upcoming referendum regarding a possible Brexit. The economic ramifications on Britain and the rest of the EU will be dire and the risk-off sentiment in case of a Brexit is likely to remain. But a decisive decision to stay in the EU could bring back up the Britain pound and lowered the elevated uncertainty levels in the financial markets. Besides the vote some other events and reports worth noticing include: Chair Yellen testifies, U.S. core durable goods, EU manufacturing PMI, Germany business climate, U.S. new and existing home sales, U.S. consumer sentiment, and German ZEW economic sentiment. So let’s review the main events for the week of May 23rd to 27th.

(All times GMT):

Monday, June 20th

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia left its cash rate unchanged at 1.75% in its last meeting; this report may move the Aussie dollar and perhaps indicate what’s next for RBA’s policy;

Tuesday, June 21st

10:00 – German ZEW economic sentiment: This report will refer to the ZEW indicator of economic sentiment for Germany for May. Back in April, the ZEW indicator for Germany dropped to 6.4 points; the current estimates are for another fall to 5.1;

15:00 –FOMC Chair Yellen Testifies: Janet Yellen will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC;

Wednesday, June 22nd

13:30 – Canada Core Retail Sales: In the previous report regarding April, sales declined by 0.3%;

15:00 –FOMC Chair Yellen Testifies: Chair Yellen will testify again but this time before the House Financial Services Committee, in Washington DC;

15:00 – U.S. Existing Home Sales: This report will refer to the U.S. existing home sales for May 2016; in the April report, the number of homes sold rose to a seasonally adjusted annual rate of 5.45 million houses; the current expectations are for the annual rate to slightly increase again to 5.53 million houses;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on June 17th;

Thursday, June 23rd

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous report, the EU’s PMI remained unchanged at 51.5 i.e. the manufacturing conditions are expanding at a steady pace as of May. Conversely, Germany’s PMI picked up again to 52.4 – the industry is expanding at a faster pace; currently, the market estimates Germany’s PMI to slip to 52.1;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the developments in the initial jobless claims for the week ending on June 17th; in the recent report, jobless claims rose to 277K; in the next report, estimates are for 271K jobless claims;

15:00 – U.S. New Home Sales: This report will pertain to May; in the last report (opens pdf file), the sales of new homes increased to an annual rate of 619,000 – the highest level since 2008; current estimates, however are for a drop in the next report to an annual rate of 561,000;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of June 17th;

Brexit Vote: The referendum will be conducted throughout the day and the results will start pouring in through the night. The market’s reaction to this news as to whether Britain remains in the EU will be seen the following day. For an update about the polls see here;

Friday, June 24th

09:00 – German Ifo Business Climate Index: The index comprises of the difference (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of June. In the May report, the business climate index picked up to 107.7; currently, the market expects a modest fall to 107.6;

13:30 – U.S Core Durable Goods: This monthly report refers to May and will indicate the developments in U.S demand for commodities including oil and gas. As of April  2016, core durable goods rose by 0.4%, month over month; in the next report, core durable goods are expected to edge up by 0.1%;

15:00 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the last report, the sentiment index rallied to 94.7;

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