Weekly Outlook of Financial Markets for November 18-22

The financial markets remained relatively calm last week: The prices of major commodities including gold and crude oil moved in an unclear trend. In the forex market, the Euro and Canadian dollar rallied against the USD, while the Aussie dollar and Japanese yen declined. The markets might start to stir up again next week as there are many news items and reports that could affect the direction of forex and commodities prices including: Bernanke’s speech, minutes of the FOMC meeting, U.S CPI and PPI, German Ifo business climate, U.S existing home sales, Japan’s trade balance, Canada’s retail sales, GB GDP for the third quarter, RBA’s governor’s speech, Japan’s monetary policy meeting, MPC rate vote, China, Germany and France’s manufacturing PMI flash reports, Philly fed index, U.S and Canada’s retail sales updates, and U.S. jobless claims.  Here is an economic outlook for the week of November 18th to November 22nd regarding the U.S, Euro Area, GB, Canada, China, Japan, Australia and Great Britain.  

(All times GMT):

Monday, November 18th

09:00 – Euro Area Current Account: In the latest report, the gap in value between imported and exported goods, services, income flows, and unilateral transfers grew to 17.4 billion Euros. This report could also indicate the recent changes in the progress of the EU economy;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital monthly update will show the developments the purchases and sales of US long term treasuries for September 2013. In the recent report regarding August 2013, the net foreign sales of U.S Treasuries longer-term notes reached a deficit of $8.9 billion;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia left its interest rate flat at 2.50%; the minutes of the latest monetary policy meeting may offer some insight behind its latest decision; this news may affect the Australian dollar and consequently commodities rates;

Tuesday, November 19th

10:00 – German ZEW economic sentiment: The upcoming report will pertain to the ZEW indicator of economic sentiment for Germany for October. In September, the ZEW indicator for Germany rose to 52.8 points; if Germany’s economic sentiment continues to increase, the Euro will plausibly strengthen against other currencies including the US dollar;

23:50 – Japanese Trade balance: Back in September 2013 the Japanese trade balance deficit expanded by 33% compared to August, and reach 1,091 billion yen (roughly $11.13 billion) deficit (seasonally adjusted figures). This sharp gain in deficit was due to the decline in exports (by 0.3%) and the rise in imports (by 3.8%). Japan is among the leading importers of commodities, including crude oil and gold; its trade balance could offer information vis-à-vis Japan’s shifts in demand for goods and services;

00:00 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give a speech at the National Economists Club Annual Dinner: Herbert Stein Memorial Lecture; the title of the speech is Communication and Monetary Policy. He is likely to relay his message of the importance of the Fed keeping the public informed of its future monetary plan. This speech could drag down the prices of gold and silver if the Chairman refers to potential plans of  pushing back up the tapering of QE3 to the last FOMC meeting of the year;

Wednesday, November 20th

09:30 –MPC Asset Purchase and Rate Votes: In the past MPC meeting, the Bank left the rate unchanged at 0.5% and the asset purchase program at £375 billion; this vote count will show how many MPC members voted on any changes to the asset purchase program or interest rate;

13:30 – U.S Core Consumer Price Index: This monthly report pertains to the main changes in the core consumer price index for October 2013. According to the U.S Bureau of Labor statistics, during September, the CPI edged up by 0.2% (month-over-month); the core CPI inched up again by 0.1%; this report could affect the USD and may also affect the FOMC’s monetary policy;

13:30 –U.S. Retail Sales Report: This monthly report refers to October; in the previous report regarding September, retail sales inched down by 0.1% (month-over-month); core retail sales rose by 0.4%; this report could signal the developments in U.S’s gasoline demand and thus may affect U.S oil prices;

15:00 – U.S. Existing Home Sales: This report will show the shifts in U.S. existing home sales during October 2013; in the last report regarding September 2013 the number of homes sold slipped to a seasonally adjusted annual rate of 5.29 million houses; if this trend persists, it might adversely affect the U.S dollar;

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 November 16th;

19:00 – Minutes of the last FOMC Meeting: Back in October, the FOMC meeting ended with no major news or change to its monetary policy. The FOMC didn’t hold a press conference following the October statement. The market reaction was very mild. The main issue remains the uncertainty around the future steps of the FOMC vis-à-vis its asset purchase program that continues to push precious metals prices in different direction. The current belief is that the Fed will hold off tapering QE3 until 2014. But some speculate the tapering could be announced at the end of 2013 at the last FOMC meeting of the year. The upcoming minutes might shed some light on this issue, which could stir up the markets again;

21:15 –Governor Poloz speaks: The Governor of Bank of Canada is due to testify, along with Senior Deputy Governor Tiff Macklem, before the Senate Standing Committee on Banking, Trade, and Commerce, in Ottawa; his words could affect the direction of the Canadian dollar;

02:45 – China Manufacturing PMI (flash): HSBC will release its flash manufacturing PMI survey for November. Last month’s report regarding October 2013 the Manufacturing PMI slipped to 50.9 – i.e. China’s manufacturing sectors is growing but at a slightly slower pace. If in the upcoming update the PMI index changes direction and rises, it could signal progress in China’s economy. This may also positively affect commodities prices;

Tentative – Japan’s monetary policy meeting and press conference: In the next Japanese monetary policy meeting, BOJ members will announce of any changes to the bank’s current asset purchase program. This decision may affect the Japanese yen;

Thursday, November 21st

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding October 2013, the Germany’s PMI inched up to 51.5 i.e. the manufacturing conditions are growing but at a slightly faster pace. France’s PMI inched down to 49.4. This report serves signals to the developments in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

09:05 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to deliver a speech titled “The Australian Dollar: Thirty Years of Floating” at the Australian Business Economists Annual Dinner, in Sydney; this speech may affect the Aussie dollar;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly update will pertain to the changes in the initial jobless claims for the week ending on November 16th; in the recent report the jobless claims slipped by 2k to reach 339k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

13:30 – U.S. Producer Price Index: This report shows the inflation rate from the producers’ side, will refer to October 2013. In the previous report regarding September, this index for finished goods slightly fell by 0.1% compared with Augusts’ level and the core PPI inched up by 0.1%; this news might affect the USD;

15:00 – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the last survey regarding October, the growth rate fell from +22.3 in September to +19.8 in October. If the index continues to fall, it may adversely 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 report of the U.S. natural gas market will pertain to the recent changes in natural gas production, storage, consumption and rates as of November 16th;

Friday, November 25th

09:00 – German Ifo Business Climate Index: This index comprises of the shifts (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of November. In the last report regarding October 2013, the business climate index inched up from 107.7 in September to 107.4 in October; if this trend continues, it might adversely affect the Euro;

13:30 – Canada CPI: According to the last report, the annual core CPI rose to 1.3% and the CPI increased to 1.1% in the past twelve months;  if the inflation continues to rise, this may affect the BOC’s monetary policy;

13:30 – Canada Core Retail Sales (September 2013): This report will refer to the manufacturing sales in Canada as of September. It may affect the USD/CAD currencies pair, which is strongly correlated with commodities. In the previous report regarding August 2013, manufacturing sales rose by 0.4%;

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