Financial Market Forecast for October 20-24

The recent weakness in the U.S. equities lead the news cycle as its also coincided with selloffs of U.S. dollar and recovery of precious metals. This week, several key reports will be released including: U.S. CPI, U.S. new home sales, China’s and GB’s GDP for the third quarter, Canada’s retail sales, EU and China’s manufacturing PMI, MPC and BOC rate decisions, EU Summit, and German consumer climate.  So let’s break down the economic calendar for the week of October 20th to 24th.  

(All times GMT):

Monday, October 20th

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia didn’t change its interest rate at 2.5%; the minutes will provide some additional input regarding the previous rate decision;

03:00 –China Third Quarter GDP 2014: In the second quarter of 2014, China expanded by 7.5% in annual terms – close to the previous quarter. The current expectations are for the growth rate to reach 7.2% for the third quarter. If the growth rate falls more, this may adversely impact commodities prices;

03:00 – China’s Industrial Production: According to the previous monthly report, China industrial production dropped to an annual rate of 6.9%; if the growth rate bounces back, it may suggest China’s economy is progressing at a faster pace;

Tuesday, October 21st

09:30 – Great Britain Public Sector Net Borrowing: Based on the last month’s report, public net borrowing reached a surplus of $10.9 billion; this measures the gap between spending and income for public corporations, the central government and local governments;

00:30 – Australia’s CPI: According to the last quarterly update, the CPI grew by 0.5%, Q-o-Q. The annual rate was 3%. The current expectations are for the quarterly report to a 0.4% quarterly gain;

Wednesday, October 22nd

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. In the last couple of votes, there were two dissenters to raise rates. Nonetheless, the current expectations are still for a rate hike in the second half of next years. The meeting could provide some input about the next move of the bank including the number of members, who think of raising the rate;

13:30 – Canada Core Retail Sales: This report may impact the USD/CAD currencies pair, which is strongly linked with commodities. In the last report regarding July 2014, manufacturing sales fell by 0.6%;

13:30 – U.S Core Consumer Price Index: This monthly report pertain to the main shifts in the core consumer price index for September 2014. According to the U.S Bureau of Labor statistics, during August, the CPI inched down by 0.2%; the core CPI remained flat; this report could impact the USD and change the FOMC’s monetary policy;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will announce its overnight rate for next month – the rate is set at 1%. The BOC isn’t likely to make any change to its policy;

15:00 – Bank of Canada’s Monetary Policy Report: The Bank of Canada will also release its quarterly monetary policy report; if the Bank presents any changes in this press conference; it could affect the Canadian dollar;

15:30 – U.S Crude Oil Stockpiles Weekly report: The EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on October 17th;

22:00 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Annual General Meeting of the Australian Payments and Clearing Association, in Sydney; this speech may impact the Aussie dollar;

02:45 – China Manufacturing PMI (flash): HSBC will release its flash manufacturing PMI survey for October. Last month’s report regarding September 2014, the Manufacturing PMI inched up to 50.5 – i.e. China’s manufacturing sectors is expanding at a slightly faster pace. But the current forecasts are for a modest drop in this index to 50.2. If the PMI index falls, it means China’s manufacturing sector is growing slower;

Thursday, October 23rd

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last monthly update regarding September 2014, France’s PMI rose to 48.8 i.e. the manufacturing conditions are contracting slower. Germany’s PMI declined again to 50.3 – the industry still grows at a slower pace. For this month, the estimates are for the German PMI to fall below 50. These estimates show the developments in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities rates;

09:30 – Great Britain Retail Sales: According to last month’s update, retail sales in Great Britain rose by 0.4%;

All Day – EU Economic Summit: This two day Summit will include the financial ministers of the EU and ECB members;

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 October 17th; in the last report the jobless claims fell to 264K;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and rates as of October 17th;

Friday, October 24th

09:00 – GfK German Consumer Climate: In the previous monthly report, the index fell to 8.3. If the index continues to slowly falling, this could suggest the German economy isn’t improving;

09:30 – Flash Great Britain GDP Q3 2014: This report will show the first estimate of the quarterly growth rate of the British economy for the third quarter of 2014; during the second quarter the GB economy expanded by 0.8% (Q-2-Q);

15:00 – U.S. New Home Sales: This report will refer to September 2014; in the last report (opens pdf; for August), the sales of new homes rose to an annual rate of 504,000 – nearly 22% gain (month-over-month); if the number of home sales continues to rally, this may suggest the housing market in the U.S is recovering – current estimates are for a contraction to an annual rate of 473K;

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