Weekly Outlook of Financial Markets for January 28 – February 1

Major commodities prices including oil rallied during last week while certain other commodities such as natural gas and precious metals changed course and fell last week. Next week several reports, meetings and events may affect the financial markets. These include: U.S GDP for Q4 2012, FOMC meeting and press conference, Euro Area monetary development, Canada’s GDP, Australia’s CPI, minutes of MPC meeting, China’s manufacturing PMI, U.S pending home sales, German retail sales, U.S non-far payroll report, Germany’s unemployment rate, and U.S. jobless claims. Here is an economic news calendar projection for January 28th to February 1st regarding the U.S, EU, Canada, China, and Great Britain.   

(All times GMT):

Monday, January 28th

09:00 – Euro Area Monetary Development: This monthly report will refer to the changes of the M3, M1 and loans to private sector in the Euro area during December 2012. In the previous November report, the annual growth rate for M3 inched down to 3.8%; M1 rose to 6.7%. Finally, the annual growth rate of loans to private sector remained at -0.5%. This news suggests the EU economy isn’t progressing; if this trend will continue it may adversely affects the Euro/USD and consequently commodities;

13:30 – U.S Core Durable Goods: This report will refer to the changes in U.S. orders of durable goods in the manufacturing sector for December 2012. This report may indirectly indicate the changes in U.S. demand for commodities such as oil. As of November 2012, new orders of manufactured durable goods rose to $220.9 billion; if this report will show another rise in new orders then it could help rally not only the USD but also commodities prices;

15:00 – U.S. Pending Home Sales: This report presents the shifts in pending home sales in the U.S. for December; in the recent update, the pending home sales index increased again by 1.7% (M-over-M). These data are another indicator for the developments in America’s housing market; if the housing data will show further rise it may positively affect the U.S dollar;

Tuesday, January 29th

07:00 – German Consumer Climate: Gfk group will come out with its German consumer climate index. If this report will continue to show a fall, it might pull down the Euro;

15:00 – U.S Consumer Confidence: according to the latest monthly report, the consumer confidence index decreased in November (M-o-M). The current expectations are that the January index may bounce back; this report might affect commodities markets including the oil and natural gas markets;

Wednesday, January 30th

08:00 – KOF Economic Barometer: this report provides an estimate to the Swiss economy in the months to follow;

Tentative – Flash Spanish GDP Q4 2012: This report will show the first estimate of the quarterly growth rate of the Spain’s economy during the fourth quarter of 2012; during the third quarter the Spanish economy contracted by 0.3% (Q-2-Q);

Tentative – Italian 10 Year Bond Auction: the Italian government will have another monthly bond auction; in the latest bond auction, which was held during the last week of December, the average rate reached 4.48% – a slightly higher rate than in the previous auction;

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 January 2013 in anticipation for the upcoming no-farm report to be published by the end of the week;

13:30 – First U.S GDP 4Q 2012 Estimate: This will be the first estimate of U.S’s fourth quarter 2012 real GDP growth. In the latest estimate the U.S GDP during the third quarter expanded by 2.7%; in the 2Q2012 the GDP growth rate reached 1.7% (annual rate). This shows a rise in the growth rate for the US’s GDP. If there will be a sharp change in the growth rate from Q2 to Q3 this could affect not only the US dollar but also commodities prices.

15:30 – U.S Crude Oil Stockpiles Report: 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 January 25th; in the previous update for January 18th, stockpiles fell by 2.6 ml bl to reach 1,796.5 ml bl.

19:15 – FOMC Meeting: The FOMC will convene for the first time in 2013 and decide at the end of two day of session on updates in its monetary policy and interest rate; in December’s FOMC meeting, the FOMC expanded its QE3 program so that the Fed is currently purchasing $40 billion worth of mortgage backed sectaries and $45 billion worth of long term secretaries. The current expectations are that the Fed will maintain its current policy. The currently low inflation rate and slow recovery in the jobs market is likely to keep this expanding monetary policy in the near future. At the same the Fed’s discussion around its exit strategy could raise the speculations in the precious metals markets. If the Fed will refer to this exit plan, it could pull down precious metals prices;

Thursday, January 31st

08:00 – German Retail Sales: This monthly report will present the changes in German retail sales during January. In December 2012, retail sales rose by 1.2% – higher than many had anticipated; if this report will rise again then it might strengthen the Euro;

08:55 – German unemployment Change: the rate of unemployment of the Germany edged up again to 6.7%. This mean, the employment situation in Germany isn’t progressing. If in the upcoming report this trend will continue, it may adversely affect the Euro;

13:30 – Canada’s GDP by Industry: the upcoming report will show the developments in major industrial sectors during November 2012. In the recent report regarding October 2012, the real gross domestic product inched up again by 0.1%. This report may affect the direction of the Canadian dollar, which is strongly linked with major commodities;

13:30 – U.S Personal Spending: this monthly report refers to the shifts in income and outlays in the U.S during December; in the last report regarding November the personal income rose by 0.4%.

13:30 – U.S. Jobless Claims Weekly Report:  this report will refer to the weekly shifts in the initial jobless claims for the week ending on January 25th; in the recent report the jobless claims declined by 5k to reach 330k; this upcoming weekly report may affect the U.S dollar and consequently commodities;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and rates as of January 25th; in recent weekly report, natural gas storage fell by 172 Bcf to 2,996 Bcf;

02:00 – China Manufacturing PMI: According the latest report regarding December 2012 the Manufacturing PMI remained at 50.6; this means that China’s manufacturing sectors is slowly expanding; last week’s flash manufacturing PMI rose again. If this upcoming report will also present growth, it could signal an improvement in China’s economy.  If the index will rise again, this may also pull up commodities rates;

Friday, February 1st

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in December 2012. In the previous report regarding November 2012 the index rose to 51.4%. This rate means the manufacturing sector is expanding at a moderately faster pace; this index might affect GB Pound;

13:30 – U.S. Non-Farm Payroll Report: in the latest report for December 2012, the labor market rallied again: the number of non-farm payroll employment rose by 155k; the U.S unemployment rate inched up to 7.8%; if in the upcoming report the employment will rise again by well above 120 thousand (in additional jobs), this may lower the odds of the Fed augmenting its current monetary policy and also better the economic conditions in the US; this report may affect not only the U.S dollar, but also commodities (see here my last review on the U.S employment report);

15:00 – U.S. Manufacturing PMI: This update will pertain to the monthly changes in the national manufacturing sector for January 2013. During December 2012 the index rose to 50.7%, which means the manufacturing is expanding; this index may affect foreign exchange rates, crude oil and natural gas markets.

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