Weekly Outlook of Financial Markets for October 7-11

Last week, leading commodities including oil and silver rallied. Conversely, other commodities such as gold and natural gas declined. The uncertainty around the progress of the U.S economy as the government shutdown continues may keep commodities moving in different directions. In the foreign exchange market, leading currencies including Euro, Aussie dollar and Canadian dollar appreciated against the US dollar during last week. Looking forward, will the US dollar continue to depreciate? What’s next for leading commodities? This week several reports and events may affect the financial markets. These include: Minutes of FOMC meeting, Japan’s current account, China’s new loans, U.S consumer sentiment, Mario Draghi speaks, GB manufacturing production, Bank of Japan’s Kuroda Speaks, OPEC and IEA monthly oil reports, Canada and Australia’s employment reports, China’s trade balance, German factory orders, and U.S. jobless claims.  Here is an economic outlook for the week of October 7th to October 11th regarding the U.S, Australia, Canada, Euro Area, China, Japan, and Great Britain. 

(All times GMT):

Monday, October 7th

08:00 – Switzerland’s Foreign Currency Reserves: Swiss National Bank will provide an update on its reserves. In the previous update, total reserves reached 434.2 billion CHF;

00:50 – Japan Current Account: This monthly report will refer to the shifts in the difference between exports and imports for Japan during the previous month; this news may affect the Japanese Yen;

Tuesday, October 8th

08:15 – Switzerland’s CPI: In the pervious report, the consumer price index slipped by 0.1%; this was the second consecutive in which the CPI declined; if the CPI continues to fall, this may eventually affect the Swiss National Bank’s monetary policy;

11:00 – German Factory Orders: The upcoming report will refer to September 2013. In the last update, the factory orders fell by 2.7% during August;

13:30 – Canadian Trade Balance: In the previous report regarding July 2013, exports declined by 0.6% and imports grew by 0.6%; as a result, the trade balance’s deficit widened from $460 million in June to $931 million in July; this report may affect the Canadian dollar, which tends to be correlated with commodities;

17:00 – SNB Chairman Jordan’s Speech: The Swiss National Bank Chairman will give a speech; if he announces or implies of any potential changes to the bank’s monetary policy, this could affect the Swiss Franc;

00:50 – Minutes of Bank of Japan’s Monetary Policy Meeting: Bank of Japan left this month its monetary policy unchanged. The minutes may offer some insight referring to the future plans of BOJ; this news may affect the Japanese yen and consequently commodities prices;

Wednesday, October 9th

09:30 – Great Britain Manufacturing Production: This update will present the annual rate of GB’s manufacturing production as of August; in the previous report regarding July 2013 the index inched up by 0.2% (M-2-M); this news may affect the British Pound;

11:00 – German Industrial Production: The forthcoming report will pertain to September 2013. In the last update, the industrial production fell by 1.7% during August;

Tentative – U.S 10 Year Bond Auction: The U.S government will issue its monthly bond auction; in the last auction, which was held at the second week of September, the average rate reached 2.95% – the highest rate since mid-2011;

15:30 – U.S Crude Oil Stockpiles Weekly Update: The EIA (Energy Information Administration) will provide its weekly update on the U.S oil and petroleum stockpiles for the week ending on October 4th;

19:00 – Minutes of the last FOMC Meeting: In the September FOMC meeting the Fed surprised the markets as it had decided to keep its monetary policy unchanged and not to taper its QE3 program. The no-tapering decision had short term effect on the prices of gold and silver but the in the bonds market long term treasuries rates fell down. Some suspect the decision was close and could have gone in the other direction (i.e. tapering QE3). The forthcoming minutes might offer some additional information behind the Fed’s recent decision and how close the decision was. This could also offer some perceptive behind the next two FOMC meetings. This report could affect not only precious metals but also forex markets;

22:00 – ECB President Speaks: Mario Draghi will give a speech at the Harvard Kennedy School of Government, in Cambridge. The title of the speech is “The Malcolm Wiener Lecture”;

Thursday, October 10th

02:30 – Australia Employment Update: In the last report regarding August 2013 the rate of unemployment inched up to 5.8%; the number of employed (seasonally adjusted) slightly decreased by 10,800 people. This report could affect the Aussie dollar (see here the recent report);

Tentative – China New Loans: This report will pertain to the recent developments in China’s new loans. Based on the previous report, the total loans changed direction and rose; this report is another indicator for China’s economic growth;

09:00 – ECB Monthly Bulletin: This monthly report for September analyzes the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some perspective on the outlooks of the EU;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will announce its basic rate for October 2013; the MPC will also state of any new shifts to its asset purchase pogrom; as of September, BOE kept its rate remained at 0.5% and the asset purchase plan at £375 billion;

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 October 4th; in the previous report the jobless claims slightly rose by 1k to reach 308k; 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 update of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and prices as of October 4th;

Tentative – OPEC Monthly Report: This report will present the main developments in crude oil and natural gas’s supply and demand for September 2013; this update will also refer to the shifts in the production of OPEC countries during the previous month; this news may affect oil prices;

17:00 – Bank of Japan’s Kuroda Speaks: Bank of Japan Governor will give a speech the Bretton Woods Committee 2013 International Council Meeting, in WashingtonDC. Considering the recent high movement of the Japanese in recent weeks, his words could influence traders;

17:20 – ECB President Speaks: Mario Draghi will give another speech this week at the at the Economic Club of New York;

Friday, October 11th

13:30 – Canada’s Employment Report: In the latest employment report for August 2013, unemployment remained inched down to 7.1%; the employment rose by 59.2k during last month. The upcoming report might affect the Canadian dollar and consequently commodities;

Tentative – China’s Trade Balance: According to the latest monthly report, China’s trade balance rose to a $28.5 billion surplus; if the surplus further rises, it could indicate China’s economy is improving and thus may positively affect commodities;

Tentative –IEA Monthly Oil Update: This report will show a revised (as of September) outlook and analysis for the global crude oil and natural gas market for 2013 and 2014;

14:55 – UoM Consumer Sentiment (preliminary):University of Michigan will publish its preliminary consumer sentiment monthly report; this survey could offer information regarding the latest shifts in U.S consumers’ sentiment; According to the last report, the sentiment index fell to 76.8;

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