Financial Market Outlook for May 23-27

The recent hawkish FOMC minutes were enough to drive back up the USD and bring down equities as the markets adjusted expectations regarding a possible rate hike. This week’s main reports and events include: U.S. core durable goods, EU manufacturing PMI, Germany economic sentiment, U.S. GDP for Q1, U.S. new and pending home sales, BOC rate decision, and GB’s GDP for Q1. So let’s review the main events for the week of May 23rd to 27th.

(All times GMT):

Monday, May 23rd

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the recent report, France’s PMI decreased to 48.3 i.e. the manufacturing conditions are contracting as of April. Conversely, Germany’s PMI picked up again to 51.9 – the industry is expanding at a faster rate; currently, the market estimates Germany’s PMI to further rise to 52.1;

04:05 – Governor Stevens speaks: Reserve Bank of Australia Governor will speak at the Trans-Tasman Business Circule boardroom briefing, in Sydney;

Tuesday, May 24th

10:00 – German ZEW economic sentiment: This report will refer to the ZEW indicator of economic sentiment for Germany for April. Back in March, the ZEW indicator for Germany rose to 11.2 points; the current estimates are for a rise to 12.1;

15:00 – U.S. New Home Sales: This report will pertain to April; in the previous report (opens pdf), the sales of new homes edged down to an annual rate of 511,000; current estimates are for a higher growth with an annual rate of 521,000;

Wednesday, May 25th

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 May. In the April report, the business climate index inched down to 106.6; currently, the market expects a modest gain to 106.9;

15:00 – Bank of Canada’s Overnight Rate: Bank of Canada maintained its overnight rate at 0.50%. And the market still expects no change to policy this time;

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 20th;

Thursday, May 26th

02:30 – Australia Private New Capital Expenditure: This quarterly report shows the changes in the private new capital expenditures and expected expenditures for Q1 2016. As of Q4 2015, the seasonal adjusted total of new capital expenditure rose by 0.8% (Q-o-Q). Current estimates are for a fall of 3.2% in Q1;

09:30 – Flash Great Britain GDP Q1 2016: This report will refer to the second estimate of the quarterly growth rate of the British economy for the first quarter of 2016; current projections are for a growth rate of 0.4% — unchanged from the first estimate;

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 May 20th; in the last report, jobless claims fell back to 278K; in the next report, estimates are for 275K jobless claims;

13:30 – U.S Core Durable Goods: This monthly report refers to April and will indicate the developments in U.S demand for commodities including oil and gas. As of March  2016, core durable goods declined by 0.2%, month over month; in the next report, core durable goods are expected to increase by 0.3%;

15:00 – U.S. Pending Home Sales: This report presents the developments in pending home sales in the U.S during April; in the previous update for March, pending home sales index rose by 1.4% (month-over-month); this time, however, the index is expected to rise by only 0.6%;

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 May 20th;

Friday, May 27th

13:30 – Second Estimate of U.S GDP for 1Q 2016: This will be the second estimate of U.S’s Q1 2016 real GDP growth. In the previous estimate for Q1 the GDP grew by only 0.5%. The current estimates are for the GDP growth rate to rise to 0.8%. A better than expected growth rate could drive higher the U.S. dollar, equities and commodities;

15:00 – UoM Consumer Sentiment (revised): University of Michigan will publish its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the recent report, the sentiment index declined to 89;

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