Financial Market Forecast for May 5-9

The commodities markets mostly rallied following the positive release of the U.S NF payroll report, in which 288k jobs were added during April. This week several reports, decisions and events will take place including: ECB, BOE and RBA rate decisions,, U.S JOLTS Job Openings, China’s CPI, Janet Yellen testifies,  EU economic outlook, U.S non-manufacturing PMI, Great Britain Manufacturing Production, Australia’s employment report, U.S, Australia, China and Canada’s trade balance updates, China new loans, and EU retail sales.  Here is an economic outlook for the week of May 5th to May 9th  

(All times GMT):

Monday, May 5th

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate of its April’s PMI index. Last month’s Manufacturing PMI reached 48 – i.e. China’s manufacturing sectors are contacting at a faster pace than in the preceding month. If the updated PMI index drops again, this will suggest China’s manufacturing conditions aren’t improving;

10:00 – EU Economic Forecast: The European Commission will issue its quarterly outlook report for the EU economy;

All Day –Euro-group Summit: The EU ministers of finance will meet and talk about the recent economic developments in EU;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to April 2014. In the recent report, this index rose to 53.1% – the non-manufacturing sector is growing at a faster pace compared to the previous month; this index may affect the US dollar;

Tuesday, May 6th

01:30 – Australian Trade Balance: The upcoming report will pertain to March. In the previous update, for February, the seasonally adjusted balance of goods and services reached a $1,200 million surplus; the report will also show the developments in the exports of gold; if gold exports rise, it might suggest a rally in demand for non-monetary gold (see here latest update);

05:30 – Reserve Bank of Australia – Cash Rate Statement: The RBA kept its cash rate unchanged since September 2013. The current rate is at 2.5% – its lowest level in years, which contributed to fall of the Aussie dollar against currencies such Euro and USD. Nonetheless, RBA isn’t likely to reduce its cash rate in the upcoming meeting – this could pull back up the Aussie dollar;

09:30 – GB Services PMI: In the last report, this index declined to 57.6; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly report will refer to March 2014. In the recent report, the volume of retail trade rose by 0.4% during February;

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

13:30 – Canadian Trade Balance: In the last report regarding February 2014, the trade balance moved from $0.3 billion deficit in January to $0.3 billion surplus in February; this report may affect the Canadian dollar, which tends to be correlated with commodities;

13:30 –American Trade Balance: This monthly update for March will show the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the last American trade balance update regarding February the goods and services deficit widened to $42.3 billion;

15:00 – Canadian Ivey PMI: In the previous report, the PMI fell to 55.2; this index may affect the progress of the Canadian dollar;

01:30 – Australian Retail Sales: It will refer to March 2014. In the recent report, the seasonally adjusted retail sales rose by 0.2% during February; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

Wednesday, May 7th

08:45 –French Industrial Production: This report will present the monthly changes in the industrial production as of April; as of March, the production inched up by 0.1%;

11:00 – German Factory Orders: This monthly report will refer to April. In the previous report, factory orders rose by 0.6% during March;

15:00 –FOMC Chair Yellen Speaks: Following the latest FOMC decision to cut down QE3 by $10 billion, FOMC Chair Janet Yellen will testify before the Committee on the Budget, U.S. Senate. The title of her speech is “The Economic Outlook”. Her words carry weight and could stir up the markets especially if she addresses to the Fed’s recent decision and future plans;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on May 2nd;

02:30 – Australia Employment Update: In the recent report regarding March 2014 the rate of unemployment remained slipped to 5.8%; the number of employed (seasonally adjusted) grew by 18,700 people. This report could affect the Australian dollar (see here the recent report);

Thursday, May 8th

08:45 –German Industrial Production: According to the previous report referring to March, the production rose by 0.4%;

Tentative – China’s Trade Balance: According to the recent monthly update, China’s trade balance dropped from a DEFICIT to a $7.7 billion surplus; if the surplus expands further, it could indicate China’s economy is improving and thus may positively affect commodities prices;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will release its basic rate for May 2014; the MPC will also state of any shifts to its asset purchase pogrom; as of April, BOE left its interest rates at 0.5% and the asset purchase plan at £375 billion;

12:45 – ECB Rate Decision: ECB will update its monetary policy and economic outlook as of May. The current expectations are that ECB might cut down its cash rate or at least the ECB President Mario Draghi may hint of future plans to slash the cash deposit rate. This rate decision could affect the Euro; an ECB press conference will also be held following the statement of the ECB regarding its monetary policy;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will pertain to the changes in the initial jobless claims for the week ending on May 2nd; in the recent report the jobless claims rose by 14k to reach 344k; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and rates as of May 2nd;

Friday, May 9th

01:30 – Reserve Bank of Australia – Monetary Policy Statement: The RBA will release its quarterly report regarding the Bank’s monetary policy;

02:30 – China’s CPI: According to the recent update, the CPI rose to an annual rate of 2.4%; if the annual rate rises again, it could signal the Chinese economy is heating up;

Tentative – China New Loans: According to the recent report, the total loans rose to 1,050 billion Yuan; this report is another indicator for China’s economic progress;

09:30 – Great Britain Manufacturing Production: This report will show the annual rate of GB’s manufacturing production as of March; in the last report regarding February 2014 the index rose by 1%; this news may affect the British Pound;

13:30 – Canada’s Employment Report: In the recent employment update for March 2014, unemployment inched down to 6.9%; the employment grew by 43k during last month. The next report might affect the Canadian dollar and consequently commodities rates;

15:00 – U.S JOLTS Job Openings: The Bureau of Labor Statistics will release its monthly update on the U.S number of job openings during April, excluding the farming industry; in the past report regarding March, the number of jobs opening was 4.17 million;

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