Weekly Outlook of Financial Markets for April 1-5

The prices of energy commodities including crude oil and natural gas rallied last week while precious metals slipped. The developments in the forex markets including the whole Cyprus bailout didn’t seem to affect the commodities markets and didn’t raise the volatility of commodities prices. In the upcoming week several reports, events and speeches may affect the financial markets. These include: U.S non-farm employment report, Bernanke’s speech, U.S manufacturing PMI, Spain’s employment update, Canada’s employment report, ECB, BOE, BOJ, and RBA rate decisions, U.S and Canada’s trade balance reports, and U.S. jobless claims.  Here is an economic outlook for the week of April 1st to April 5th regarding the U.S, China, Euro Area, Japan, Australia, Canada, and Great Britain.   

(All times GMT):

Monday, April 1st

02:00 – China Manufacturing PMI: According the recent report regarding February 2013 the Manufacturing PMI edged down to 50.1; this means that China’s manufacturing sectors is expanding at a slower rate. If in the upcoming report the PMI will fall below the 50 point mark, it could signal deterioration in China’s economy. If the index will fall, this may also adversely affect commodities rates;

15:00 – U.S. Manufacturing PMI: This report will refer to the monthly changes in the national manufacturing sector for February 2013. During February 2013 the index increased to 54.2%; this means the manufacturing is growing at a faster pace; this index may affect foreign exchange rates, crude oil and natural gas markets.

Tuesday, April 2nd

05:30 – Reserve Bank of Australia – Cash Rate Statement: in the past couple of months, the overnight money market rate of Australia’s Reserve Bank remained unchanged 3%, which is still the lowest level since the September 2009. RBA reduced the rate four times last year by a total of 1.25pp. If the RBA will decide to cut its rate again, this news may affect the Australian dollar, which tends to be strongly correlated with commodities;

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain increased again in February by 59.4k. This mean, the employment situation in Spain has deteriorated in recent months. If in the upcoming report this trend will persist, it may adversely affect the Euro;

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in February 2013. In the previous report regarding January 2013 the index declined to 47.9. This rate means the manufacturing sector is contracting at a slow pace; this index might affect GB Pound;

10:00 – Euro Area unemployment rate: the rate of unemployment of the Euro Area edged up by 0.2 pp to 11.9%, according to last month’s report. This mean there the unemployment isn’t improving. If in the upcoming report this trend will continue, it may adversely affect the Euro;

15:00 – U.S Factory Orders: This report will show the changes in U.S. factory orders of manufactured durable goods during March; in the previous report factory orders fell by 2%; this report will offer some insight regarding the progress of the U.S economy and could affect the path of the U.S dollar;

02:30 – Australian Trade Balance: The report will refer to February 2013. In the previous update, regarding January, the seasonally adjusted balance of goods and services expanded its deficit to $1,057 million. The export of non-monetary gold rose by $211 million; if the gold exports will continue to rise in February, it might suggest a gain in demand for non-monetary gold (see here recent report);

Wednesday, April 3rd

13:15 – ADP estimate of U.S. non-farm payroll: ADP will publish its estimate for the upcoming U.S non-farm payroll change for March 2013 in anticipation for the forthcoming non-farm report to be published on Friday;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will pertain to the developments in the non-manufacturing sector during March 2013. For recent update, this index edged up to 56% – this means the non-manufacturing is expanding and at a faster pace than in the previous month; this index may affect the USD;

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on March 29th; in the recent update for March 22nd, stockpiles declined again by 1.9 ml bl to reach 1,773.4ml bl.

00:30 – Australian Retail Sales: The upcoming monthly update will refer to February 2013. In the recent update, the seasonally adjusted retail sales rose by 0.9% during January; this news may affect the Aussie dollar;

Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement: Bank of Japan will come out with its interest rate and monetary policy for April. The current expectations are that BOJ won’t augment its asset purchase program any further this month. If the Bank will surprise and change its current monetary policy or change its outlook for Japanese economy, this could affect the direction fo the Japanese yen;

Thursday, April 4th

Tentative – Spanish 10 Year Bond Auction: the Spanish government will come up with another bond auction; in the previous bond auction, which was held a couple of weeks ago, the average rate reached 4.9% – the lowest rate in recent months;

12:00 –BOE Rate Decision & Asset Purchase Plan: Bank of England will come out with its decision regarding its basic rate for April 2013 and will announce of any new developments vis-à-vis its asset purchase pogrom; as of March BOE kept the rate unchanged at 0.5% and the asset purchase plan s at £375 billion;

12:45 – ECB Rate Decision: The current 0.75% rate hasn’t changed since July 2012. The recent developments in Cyprus pressured down the Euro even further. These developments aren’t helping to raise the confidence of investors in the Euro. Many think ECB President Mario Draghi will eventually have to lower the interest rate to help rally the slowly contracting EU economy. The question is when this decision will take place. Currently, the expectations are that Draghi will keep the rate unchanged once again;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly update will refer to the changes in the initial jobless claims for the week ending on March 29th; in the recent report the jobless claims rose by 16k to reach 343k; this forthcoming weekly report may affect the U.S dollar and consequently commodities and stocks markets;

15:30 – EIA U.S. Natural Gas Storage Update: 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 March 29th; in latest weekly report, natural gas storage fell by 95 Bcf to 1,781 Bcf;

15:30 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give a short speech at the 13th Annual Redefining Investment Strategy Education (RISE) Forum. The title of his speech is “Brief Remarks on Financial and Economic Education“. Following the recent FOMC meeting and Bernanke’s testimony from last month, the Chairman of Fed didn’t reveal about the future steps of the FOMC. I suspect this speech will have little effect on the financial markets;

Friday, April 5th

08:00 – Swiss National Bank Foreign Currency Reserve: The Bank will publish its Foreign Currency Reserve; based on the recent update, the forex reserves slightly increased compared to the previous month;

13:30 – Canada’s Employment Report: In the recent employment update for February 2013, unemployment remained flat at 7%; the employment rose by 51k during the month. The upcoming report might affect the Canadian dollar and consequently commodities;

13:30 –American Trade Balance: This monthly update for February will present the recent developments in imports and exports of goods and services to and from the U.S, including commodities such as oil and natural gas; according to the recent American trade balance report regarding January the goods and services deficit rose during the month to $44.4 billion;

13:30 – Canadian Trade Balance: In the latest report regarding January 2013, exports rose by 2.1% and imports also increased by 1.9%; as a result, the trade deficit narrowed from a $332 million deficit in December to $237 million deficit in January; this report may affect the Canadian dollar which tends to be correlated with prices of commodities;

13:30 – U.S. Non-Farm Payroll Report: in the previous report for February 2013, the labor market sharply increased again: the number of non-farm payroll employment rose by 236k; the U.S unemployment rate slipped to 7.7%; if in the forthcoming report the employment will rally again by well above 150 thousand (in additional jobs), this may cut again the demand for safe haven investments such as gold and silver. This could pull down the prices of precious metals (see here my last review on the U.S employment report);

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