Weekly Financial Markets Outlook for June 4-8

The commodities markets experienced one of the most turbulent weeks in 2012 (up to date) as gold and silver prices sharply rose on Friday while major energy commodities prices including oil and natural gas tumbled down throughout the week. The disappointing U.S reports including the revised down U.S GDP, the drop in the growth rate of the U.S. manufacturing PMI and low numbers of added jobs in the recent U.S employment report may have contributed to decline in energy prices. At the same time it also reignited the speculation around the possibility of the Fed introducing another stimulus plan. This speculation is likely among the reasons for rally in bullion rates. The ongoing debt crisis in Europe is a factor to drag down not only the Euro/USD currency pair but also commodities prices. Spain is another country that is facing debt problems and it could keep the Euro/USD low. Greece will also continue to be in the news and may keep affecting the forex and commodities markets (see here for a review on the potential ramification a Grexit on the precious metals market). There are several important publications, speeches and events that may affect the financial markets including: U.S trade balance, ECB rate decision, testimony of Bernanke, U.S non-manufacturing PMI, Canada, Australia and GB rate decision, China’s CPI, decision employment, Japan current account and U.S. jobless claims. Here is an economic news calendar outlook for June 4th to June 8th regarding the U.S., EU, China, Japan, EU, Australia, Canada and Great Britain.   

(All times GMT):

Monday, June 4th

15:00 – U.S Factory Orders: This report will show the developments in U.S. factory orders of manufactured durable goods during April; this report will offer some insight to the growth of the U.S economy and could affect the direction of the U.S dollar;

Tuesday, June 5th

4:30 – Reserve Bank of Australia – Cash Rate Statement: the overnight money market interest rate of Australia’s Reserve Bank declined by 0.5 percent points to 3.75%. This was the first rate change since December 2011; if the RBA will decide to change the rate this news may affect the Aussie dollar that is strongly linked with commodities prices;

11:00 – German Factory orders: this report will highlight the shifts in the Germany factory orders during April; this news could indicate the progress of the German Economy and consequently may affect foreign exchange and commodities traders; last time, the orders sharply rose by 2.2%;

14:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will publish its decision regarding the overnight interest rate, which remained unchanged at 1% in the previous decision. The BOC may continue its policy and keep the interest rate flat;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will show the developments in the non-manufacturing sector during May 2012. During April 2012 this index declined to 53.5% – this still means the non-manufacturing is expanding but at a slower pace than before; this index may affect forex and commodities trading;

2:30 – Australian GDP First Quarter 2012: This quarterly report will refer to the change in Australia’s GDP growth rate in the first quarter of 2012. In Q4 2011, the GDP expanded by 0.4% (seasonally adjusted). The recent slowdown in China’s growth might also affect the growth of Australia’s GDP. Australia is among the leading countries in exporting commodities such as crude oil and metal ores; if the growth rate will continue to dwindle it could affect the Aussie dollar (see here last report);

Wednesday, June 6th

11:00 – German Industrial Production: this report will refer to the changes in the German industrial production during April; this news could indicate the development of Germany’s output and consequently may affect the Euro/USD currency pair and commodities prices; last time, the industrial output sharply rose by 2.8%;

12:45 – ECB Press Conference and Euro Rate Decision: In previous interest rate decision the President of ECB, Mario Draghi left the rate unchanged at 1%; as of April, the Euro Area inflation slipped to an annual rate of 2.6%, while the EU unemployment edged up to 10.9% and the EU GDP in the Q1 2012 was 0%. Along with the recent developments in Spain and Greece and ongoing perils the EU has forthcoming, ECB might consider remaining on the sidelines until the uncertainly will decline and keep its policy unchanged; nonetheless, if the ECB will make a change, it may affect the Euro to US dollar exchange rate;

13:15 – FOMC Member Lockhart Speaks: FOMC member Lockhart will give a speech about the U.S economy. If he will hint of the future steps of the FOMC it might affect the financial markets;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on June 1st; in the previous weekly report for May 25th, stockpiles rose by 5.5 million bl to 1,776.5 million bl;

2:30 – Australia Rate of Unemployment: in the previous report regarding April 2012 the rate of unemployment edged down to 4.9%; the number of employed rose by 15,500 people; the number of unemployed fell by 28,800 during April compared with March‘s figures. If this trend ill continue to could affect the Australian dollar (see here the recent report);

Thursday, June 7th

08:00 – Swiss National Bank Forex Reserves: the central bank of Switzerland will release the total value of its foreign currencies reserves during May;

Tentative – French 10 Year Bond Auction: the French government will issue another bond auction; in the previous bond auction, which was held at the beginning of May, the rate reached 2.96%;

13:30 – U.S. Department of Labor– Jobless Claims Weekly Report:  this update will pertain to the weekly changes in the initial jobless claims for the week ending on June 2nd; in the latest update the jobless claims rose by 10k to 383,000; this upcoming weekly report may affect the U.S dollar and consequently commodities rates;

12:00 – Great Britain Bank Rate & Asset Purchase Plan : Bank of England will decide on its basic rate for June 2012 and the progress of its asset purchase plan; as of May the BOE’s rate was still unchanged at 0.5% and the asset purchase plan of £325 billion continues;

15:00 – Bernanke’s Testimony: This will likely be the main event of the week. Following the recent U.S employment report many think this will trigger the Fed to lean towards another stimulus plan. The Chairman of the Federal Reserve will testify before the Joint Economic Committee in the U.S Senate. The title of the speech is “Economic Outlook and Policy”; if the Chairman of the Fed will consider the recent U.S economic developments as a turn for the worst it could signal that the Fed might consider another monetary intervention;    

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly update of the U.S. natural gas market will pertain to the recent changes in natural gas production, storage, consumption and price as of June 1st; in the previous report, natural gas storage rose by 71 Bcf to 2,815 Bcf;

00:30 – Japan Current Account: this report will present the shifts in the difference between exports and imports for Japan during last month; this news may affect the strength of the Japanese Yen;

2:30 – Australian Trade Balance: The upcoming report will pertain to April 2012. In the previous report, the seasonally adjusted balance of goods and services expanded from a deficit of $754 million in February 2012 to a $1,587 million deficit in March 2012. The export of non-monetary gold rose by $75 million (6%); if the gold exports will continue to rise April, it might suggest a rise in demand for non-monetary gold (see here last report);

Friday June 8th

09:30 – Great Britain PPI Input: this report will present the yearly rate of GB’s producer price index for May 2012; in the last report regarding April the input price declined by 1.5% (M-2-M); this news may affect the British Pound;

Tentative – GB 10 Year Bond Auction: the British government will issue another bond auction; in the previous bond auction, which was held at the beginning of April, the rate reached 2.22%;

13:30 – Canada’s Employment Report: In the previous employment report for April 2012, unemployment edged up by 0.1 percent points to 7.3%; the employment increased by 58k. the upcoming report might affect the Canadian dollar and consequently also affect the rates of energy commodities including crude oil and natural gas prices; consider that Canada is among the leading exporters of these commodities to the U.S (see here the recent report);

13:30 –Canadian Trade Balance: In the previous report regarding March 2012, exports decreased by 0.4%, and imports fell by 0.6%; as a result, the trade balance surplus rose to $351 million; this report may affect the trading of the Canadian dollar which tends to be strongly linked with price of gold and crude oil;

13:30 –American Trade Balance: This monthly report for April 2012 will present the changes in imports and exports of goods and services to and from the U.S, including commodities such as crude oil; according to the recent American trade balance report regarding March 2012 the goods and services deficit increased during the month to $51.8 billion.

3:30 – Chinese CPI: during April, the Chinese inflation rate slightly declined to an annual rate of 3.4%; this rate is below China’s inflation target of 4% in annual terms. If the inflation will continue to decline it could indicate that China’s economic progress is slowing down; China is among the leading countries in importing commodities such as gold and oil;

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