Financial Market Preview for May 18 -22

The U.S. dollar took another beating this week as it depreciated against the Euro and yen, while the stock market didn’t do much and commodities rallied – this mainly includes gold and silver. This week, the FOMC will release the minutes of its last meeting. Other main reports include: U.S. CPI, BOJ’s monetary policy meeting minutes, RBA’s minutes of last meeting, Japan’s GDP for Q1, China’s manufacturing PMI, GB CPI, U.S. housing starts, Great Britain Claimant Count Change, EU CPI, Philly Fed index, and Canada’s retail sales . So let’s review the economic calendar for the week of May 18th to 22nd.  

(All times GMT):

Monday, May 18th

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia cut its cash rate to 2%; the minutes will provide additional information behind the

Tuesday, May 19th

09:30 – GB CPI: According to the latest monthly update, the CPI remained flat in February. The current projections are for another 0% inflation in April;

10:00 – German ZEW economic sentiment: This report will pertain to the ZEW indicator of economic sentiment for Germany for April. Back in March, the ZEW indicator for Germany slipped to 53.3 points; if Germany’s economic sentiment keeps falling, this may imply a slowdown in the recovery of Germany’s economy;

10:00 – EU CPI (final): Based on the flash estimate, the CPI reached an annual rate of -0.1% for April. This number means the EU is in deflation. The developments in EU’s inflation could influence ECB members in changing the bank’s monetary policy; current estimates the rate will reach 0%;

13:30 – U.S. Housing Starts: The U.S Census Bureau will publish its U.S. housing starts monthly update for April 2015; in the last report, housing starts rose to 930K houses;

13:30 – U.S. Building Permits: In the last report, during March, building permits slightly declined to 1,040K houses (the latest U.S building permits update); current estimates are for a modest gain to 1,060K;

15:45 –BOC Governor Poloz Speaks: The Governor will hold a press conference at the Chamber of Commerce, in Charlottetown;

23:50 – Japanese GDP for Q1 – Preliminary estimate: In the fourth quarter of the year, the Japanese economy expanded by 0.6% while in the third quarter it also fell by 0.4%; this time, the report will present the first estimate for the first quarter of the year. The current estimates are that economy expanded by 0.4%, year over year;

Wednesday, May 20th

09:30 –MPC Asset Purchase and Rate Votes: In the latest MPC meeting, the Bank maintained its rate at 0.5% and the asset purchase program at £375 billion; now that the elections are over, the MPC will start to consider the timing of the future rate hike. For now, however, it’s unlikely to see any changes to policy;

13:30 – Canada Wholesale Sales: In the recent report regarding March 2015, wholesale sales declined by 0.4%; current expectations are for a 0.3% bump up;

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 May 15th;

19:00 – Minutes of FOMC Meeting: This will be the main event of the week. In the previous meeting in April, the FOMC didn’t provide any guidance about the next rate hike and left the door open of such a decision in any of the coming meetings – as usual keeping it all data dependent. The minutes could reveal some more of the deliberations among FOMC members and what’s up ahead for the next move of the FOMC;

Thursday, May 21st

02:45 – China Manufacturing PMI (flash): HSBC will publish its flash manufacturing PMI survey for May. Last month’s report regarding April 2015, the Manufacturing PMI remained unchanged at 49.2 – i.e. China’s manufacturing sectors is still contracting. The current expectations are for this index to inch up to 49.5. If the PMI index doesn’t pass the 50 mark, it will suggest China’s manufacturing sector isn’t growing;

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly update regarding April 2015, France’s PMI rose to 48.4 i.e. the manufacturing conditions are still contracting but at a slower rate. Germany’s PMI slipped to 51.9 – the industry is growing slower. This time, the estimates are for the German PMI to remain unchanged at 51.9. This news, in turn, may move the Euro;

09:30 – Great Britain Retail Sales: According to last month’s report, retail sales in Great Britain declined by 0.5%;

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 May 15th; in the previous report, jobless claims declined to 264K; the expectations are  for this number to slightly rise to 267K;

15:00 – Philly Fed Manufacturing Index: This monthly survey estimated the growth of the US manufacturing sectors. In the last survey regarding April, the growth rate rose from +5 in March to +7.5 in April. If the index were to keep rising, it may suggest the U.S. economy is progressing (the recent Philly Fed review);

15:00 – U.S. Existing Home Sales: This report will pertain to the U.S. existing home sales for April 2015; in the previous report regarding March, the number of homes sold rose to a seasonally adjusted annual rate of 5.19 million houses; the current expectations are for the annual rate to rise again to 5.23 million houses;

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 May 15th;

Friday, May 22nd

Tentative – Japan’s rate decision and press conference: In the next Japanese monetary policy meeting, BOJ members will review the bank’s monetary policy and whether it’s time to change the bank’s asset purchase program;

09:00 – German Ifo Business Climate Index: The index consists of the difference (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of May. In the April update, the business climate index rose to 108.6 – the current expectations are that the index will decline to 108.3;

09:00 –ECB President Draghi Speaks: Draghi is expected to speak at the ECB Forum on Central Banking titled “Inflation and Unesmployment in Europe,” in Portugal;

13:30 – Canada’s core CPI: According to the last report, the CPI grew by 0.6%, M-o-M. The current expectations are for the next report to show a 0.1% monthly gain;

13:30 – U.S Core Consumer Price Index: This monthly report refer to the changes in the core consumer price index for April 2015. According to the U.S Bureau of Labor statistics, during March, the CPI inched up by 0.2% the core CPI also rose by 0.2%; this report could impact the USD and influence the FOMC members to maintain low rates;

13:30 – Canada Core Retail Sales: In the last report regarding March 2015, manufacturing sales rose by 2%; current estimates are for a 0.7% gain in the upcoming report;

15:30 –ECB President Draghi Speaks: President Draghi will also participate in a panel discussion at the ECB Forum on Central Banking titled “Inflation and Unemployment in Europe,” in Portugal;;

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