Financial Market Forecast for June 16-20

Leading commodities markets heated up again in the past week as the prices of precious metals, natural gas and oil rallied. This week, the main event of the week will revolve around the upcoming FOMC meeting and press conference. Several other economic reports and events will come to fruition including: U.S housing starts and building permits, Kuroda‘s speech, EU  CPI, minutes of RBA monetary policy meeting, U.S industrial production, Great Britain retail sales, U.S CPI, minutes of BOJ policy meeting, and Philly Fed index. So let’s break down the economic calendar for the week of June 16th to June 20th.  

(All times GMT): 

Monday, June 16th

10:00 – EU CPI: According to the latest update, the CPI inched up to an annual rate of 0.7% during April. The developments in EU’s inflation could affect ECB’s monetary policy;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital monthly report will show the developments the purchases and sales of US long term treasuries for April 2014. In the previous report regarding March 2014, the net foreign sales of U.S Treasuries longer-term notes reached a surplus of $4 billion;

14:15 –U.S Industrial Production: This report will present the monthly changes in the U.S industrial production during May; as of April, the production fell by 0.6%; this report may affect the US dollar;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia maintained its interest rate at 2.50%, and the RBA is likely to keep its monetary policy and its rate unchanged in the coming months. The minutes of the recent monetary policy meeting may offer some insight behind its latest rate decision;

Tuesday, June 17th

10:30 – GB CPI: According to the recent update, the CPI inched up to an annual rate of 1.8% during April. The changes in Great Britain’s inflation could affect BOE’s monetary policy;

10:00 – German ZEW economic sentiment: The next report will refer to the ZEW indicator of economic sentiment for Germany for May. In April, the ZEW indicator for Germany fell again to 33.1 points; if Germany’s economic sentiment continues to tumble, the Euro could plausibly weaken against other currencies including the US dollar;

13:30 – U.S. Housing Starts: The U.S Census Bureau will release its U.S housing starts monthly update for May 2014; this report was historically correlated withgold price – as housing starts rises, gold tends to fall the next day (even when controlling to the U.S dollar effect); in the past report, housing starts grew by 12% during April to reach over 1,070K houses;

13:30 – U.S. Building Permits: In the last report, during April, building permits rose by 9% (m-o-m) as the adjusted annual rate of building permits reached 1,080K. If building permits continues to rise, it may indicate that the U.S housing market is heating down (the recent U.S building permits update);

13:30 – U.S Core Consumer Price Index: This monthly report pertain to the main changes in the core consumer price index for May 2014. According to the U.S Bureau of Labor statistics, during April, the CPI rose by 0.3%; the core CPI also inched up by 0.2%; this report could affect the USD and the FOMC’s monetary policy;

23:50 – Japanese Trade balance: Back in March 2014 the Japanese trade balance deficit narrowed to 840 billion yen (roughly $8.23 billion) deficit (seasonally adjusted figures). Japan is among the leading importers of commodities, including crude oil and gold; its trade balance could offer information vis-à-vis Japan’s developments in its demand for goods and services;

23:50 – Bank of Japan’s Monetary Policy Meeting Minutes: The minutes of BOJ’s monetary policy meeting could offer some insight behind its recent meeting;

Wednesday, June 18th

09:30 –MPC Asset Purchase and Rate Votes: In the last MPC meeting, the Bank left its cash rate at 0.5% and the asset purchase program at £375 billion; if the Bank decides or even hints of a potential rate hike anytime soon, this news could pull further up the British pound;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on June 13th;

19:00 – FOMC Meeting and Press Conference: The highly anticipated FOMC meeting will take place between June 17th and 18th. The FOMC is likely to announce its fifth tapering decision of its QE3 program by another $10 billion to $35 billion a month. The FOMC may also refer to any potential future changes to its future monetary policy in the press conference that follows the statement release, i.e. the timing of when to raise its cash rate. Since the labor market is improving and the inflation remains stable, the FOMC might decide to change its policy. Conversely, the GDP didn’t grow in the past quarter and the housing market is only slowly recovering. If the Fed tapers again QE3, it is might pull up USD and drag down (for a short period) gold and silver prices;

Thursday, June 19th

08:30 – Libor Rate of Swiss National Bank: The Swiss National Bank will release its Libor rate decision; this decision could affect not only currencies markets but also commodities markets, assuming, the bank changes its Libor rate;

09:30 – Great Britain Retail Sales: According to last month’s report, retail sales in Great Britain rose by 1.3%; this report could affect the British pound;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on June 13th; in the recent report the jobless claims rose by 4K to reach 317K; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

15:00 – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the previous survey regarding May, the growth rate slipped from +16.6 in April to +15.4 in May. If the index further falls, it may negatively affect not only U.S Dollar but also U.S equity markets and commodities(the recent Philly Fed review);

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of June 13th;

Friday, June 20th

01:00 –Governor Kuroda speaks: The Governor of Bank of Japan will give a speech at the National Association of Shinkin Banks, in Tokyo. His words could stir up the Japanese yen; he might refer to the recent monetary policy meeting of BOJ in which the bank left the policy unchanged;

09:30 – Great Britain Net Borrowing: According to last month’s report, public sector’s net borrowing in Great Britain reached 9.6 billion pounds;

All Day – ECOFIN Summit: The EU ministers of finance will meet and talk about the latest economic changes in Europe;

13:30 – Canada Core CPI: This monthly report will present the developments in the CPI and core CPI of Canada for April; in the recent report, the core CPI increased by 0.2%;

13:30 – Canada Core Retail Sales: This report may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the last report regarding March 2014, manufacturing sales rose by 0.1%;

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