Weekly Outlook of Financial Markets for April 15-19

Major commodities including crude oil gold and silver tumbled down during most of last week. The sharp fall in oil prices may have stemmed from the recent negative U.S report (e.g. retail sales) that showed a decline in demand, and the recent IEA report that showed a lower than expected deliveries of oil in the first quarter of 2013. Precious metals tumbled down following the latest minutes of the FOMC meeting. Conversely, major currencies pairs such as the Euro/USD rallied during the previous week. The upcoming week might continue to be characterized with high volatility. Will commodities continue their downward trend next week? In the upcoming week several reports, events and speeches may affect the financial markets. These include: U.S CPI, Philly fed survey, China’s GDP for Q1 2013, U.S housing starts, Canada’s manufacturing sales, Germany’s ZEW economic sentiment, Japan’s trade balance, Canada’s CPI, GB Claimant Count Change,  minutes of MPC monetary policy, minutes of RBA meeting, Great Britain PPI input, and U.S. jobless claims.  Here is an economic forecast for the week of April 15th to April 19th regarding the U.S, Euro Area, China, Japan, Canada, Australia, and Great Britain.   

(All times GMT):

Monday, April 15th

03:00 –China First Quarter GDP 2013: Update: China’s GDP grew by only 7.7% lower than in the previous quarter. During the fourth quarter of 2012, China grew by only 7.9% in annual terms; the current expectations are that the Q1 2013 grew in annul terms by a slower pace than in the previous quarter;

07:15 – Kuroda’s Speech: Bank of Japan Governor will speak at the 88th Convention of the Trust Companies Association of Japan in Tokyo;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital monthly report will show the shifts in the purchases and sales of US long term treasuries for February 2013. In the recent report regarding January 2013, the net foreign sales of U.S Treasuries longer-term notes rose by $25.7 billion;

00:30 – Minutes of Australia’s Bank Monetary Policy Meeting: The minutes of the latest monetary policy meeting of the Reserve Bank of Australia may provide some perceptive regarding the main reasons behind the board’s recent decision to keep the basic interest rate unchanged at 3%; the minutes of this meeting may affect the Australian dollar and consequently commodities rates including oil and gold;

Tuesday, April 16th

09:30 – GB CPI (March 2013): This report may affect the path of the British Pound currency. In the latest report regarding February 2013, the CPI rose to an annual rate of 2.8%;

09:30 – Great Britain PPI Input: this report will refer to the GB’s PPI input for March 2013; as of the latest monthly update regarding February 2013, the PPI input rose by 3.2%;

10:00 – Euro Area CPI: according to the previous update the annual CPI fell again to 1.8%, which is slightly lower than ECB’s target inflation; if the inflation will continue to decline, it could raise the chances of ECB cutting its cash rate in the near future;

11:00 – German ZEW economic sentiment: The upcoming report will refer to the ZEW indicator of economic sentiment for Germany for April. In March the ZEW indicator for Germany slightly rose again to 48.5 points; if Germany’s economic sentiment will increase further, the Euro will plausibly strengthened against other currencies such as the USD;

Tentative – Bank of England Inflation letter: this report will present the yearly rate of GB’s inflation based on the estimate of Bank of England; the bank will publish the letter only if the inflation is exceed 3% or will be below 1%;

13:30 – Canada Manufacturing Sales (February 2013): This report will pertain to the manufacturing sales in Canada as of February. It may affect the USD/CAD currencies pair, which is strongly linked with commodities rates. In the latest report regarding January 2013, manufacturing sales slipped again by 0.2%;

13:30 –U.S Core Consumer Price Index: This monthly update will refer to the main developments in the core consumer price index for March 2013. According to the U.S Bureau of Labor statistics during February, the CPI rose by 0.7% (M-o-M); the core CPI slightly increased by 0.2%; the core index rose over the past twelve months by 2.0%;

13:30 – U.S. Housing Starts: the U.S Census Bureau will come out with its U.S housing starts monthly report for March 2013; this report was historically correlated with gold price – as housing starts rise, gold prices tended to decline the next day (even when controlling to the U.S dollar effect); in the recent monthly report, the adjusted annual rate reached 917,000 in February 2013, which was 0.8% from January’s rate;

13:30 – U.S. Building Permits: in the recent update, building permits rose during February by 4.6% (M-o-M) in the adjusted annual rate of building permits was 904,000. If building permits will continue to increase, it may indicate that the U.S housing market (from this aspect) is recovering (the recent U.S building permits update);

14:00 – ECB President Speaks: Mario Draghi will give a speech in Strasbourg. He is scheduled to talk about ECB’s activities at the European Parliament. If Draghi will provide some insight behind the future plans of the ECB’s monetary policy, this speech could affect the Euro;

Wednesday, April 17th

09:30 – Great Britain Claimant Count Change: This report will present the changes in the number of unemployed in GB; as of the previous month’s report this figure had declined by 1.5k; the rate of unemployment remained unchanged 7.8% in the recent report;

09:30 – Minutes of MPC Meeting: in the latest MPC meeting, the Bank left the rate unchanged at 0.5% and the asset purchase program at £375 billion; the MPC still has concerns regarding GB’s inflation. The minutes of last week’s meeting might offer some insight behind this decision;

Tentative – German 10 Year Bond Auction: the German government will issue its monthly with bond auction; in the latest bond auction, which was held at the end March, the average rate reached 1.36% – the lowest rate this year so far;

15:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will announce its decision on the Canadian overnight rate, which remained flat in recent years at 1%. The BOC may keep its policy and maintain its interest rate at 1%; the latest slowdown in Canada’s economy might prompt BOC to reduce the rate;

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly report on the U.S oil and petroleum stockpiles for the week ending on April 13th; in the recent update for April 5th, stockpiles rose by 5.8 ml bl to reach 1,779.1 ml bl.

23:50 – Japanese Trade balance: The Japanese trade balance deficit for February 2013 rose by 47.4% compared to January, and reach 1,086 billion YEN (roughly $11.08 billion) deficit (seasonally adjusted figures). This rise is due to the higher growth in imports (by 6.8%) than in exports (by 1.3%). Japan is among the leading importers countries of commodities, including crude oil and gold; its trade balance could offer some perspective regarding Japan’s developments in demand goods and services;

Thursday, April 18th

Tentative – Spanish 10 Year Bond Auction: Spain will issue its monthly with bond auction; in the recent bond auction, which was held at the beginning of April, the average rate reached 4.48% – the lowest rate in recent months;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly update will refer to the shifts in the initial jobless claims for the week ending on April 6th; in the latest report the jobless claims declined by 42k to reach 388k; this upcoming weekly update may affect the path of U.S dollar and consequently commodities and stocks markets;

15:00 – Philly Fed Manufacturing Index: This monthly survey presents an estimate for the growth of the US manufacturing sectors. In the latest March survey, the growth rate changed course and rose from -12.5 in February to 2.0 in March. If the index will continue to rise it may positively affect not only U.S Dollar but also American stocks and commodities markets (the previous Philly Fed review);

15:30 – EIA U.S. Natural Gas Storage: the EIA weekly report of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and prices as of April 12th; in latest weekly report, natural gas storage slightly declined by 14 Bcf to 1,673 Bcf;

16:00 – BOC Gov Carney Speaks: Carney will give a speech at the Thomson Reuters on-stage interview, in Washington DC. His speech might affect the Canadian dollar if his speech will provide a surprising headline;

All Day – G20 Meeting: The leading ministers of finance will convene for a two day meeting. The meeting might affect the financial markets if there will be big headlines coming out of this summit;

Friday, April 19th

13:00 – Canada’s core CPI: This report will pertain to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for March 2013. According to the Canadian CPI report for February 2013, the core CPI rose by 0.8% during the month. This report might affect the Canadian dollar, which is also strongly linked with commodities rates;

All Day – IMF and G20 Meeting: In these Summits the economic leaders might talk over the recent developments including Cyprus and the debt crisis in Europe;

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