Weekly Outlook of Financial Markets for March 4-8

The prices of major commodities including gold, crude oil and silver fell again on a weekly scale; major currencies pairs including the Euro and Aussie dollar also depreciated against the USD during the previous week. Will commodities and risk currencies continue to decline next week? In the forthcoming week several reports, events and decisions may affect the financial markets. These include: U.S non-farm employment report, Spain’s employment update, ECB rate decision, Australia’s GDP fourth quarter estimate, Canada’s employment report, BOE, BOJ, BOC and RBA monetary policy meetings and rate decisions, U.S, China and Canada’s trade balance monthly update, ECONFIN meeting, Australia’s retail sales, and U.S. jobless claims.  Here is an economic outlook for the week of March 4th to March 8th regarding the U.S, Euro Area, China, Japan, Australia, Canada, and Great Britain.   

(All times GMT):

Monday, March 4th

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain rose in January by 132k. This mean, the employment situation in Spain has deteriorated. If in the forthcoming report this trend will continue, it may adversely affect the Euro;

All Day – EU Economic Summit: In this summit, the EU ministers of finance will meet in Brussels. In this summit the EU ministers are likely to talk over the EU economic developments and the future steps needed to recover the EU economy;

00:30 – Australian Retail Sales: The upcoming report will refer to January 2013. In the previous update, the seasonally adjusted retail sales inched down by 0.2% during December; this news may affect the Aussie dollar;

05:30 – Reserve Bank of Australia – Cash Rate Statement: as of last month, the overnight money market rate of Australia’s Reserve Bank remained at 3%, which is still the lowest level since the end of 2009. RBA cut the rate a few times last year. If the RBA will decide to reduce its rate again, this news may affect the Australian dollar that is strongly linked with commodities;

Tuesday, March 5th

All Day – ECONFIN Meetings: EU ministers of finance and EU leading policymakers will convene for the monthly meeting;

09:30 – GB Services PMI: This report will refer to the changes in the services sector during February 2013. As of January 2013this index increased to 51.5% – this means the services sector is growing; this index may affect forex and commodities trading;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly update will refer to the developments in the non-manufacturing sector during February 2013. For the previous update, this index declined to 55.2% – this means the non-manufacturing is growing and at a slower pace than in the previous month; this index may affect the USD;

02:30 – Australian GDP Fourth Quarter 2012: This quarterly report will pertain to the Australia’s GDP growth rate for the fourth quarter of 2012. In Q3 2012, the GDP expanded by 0.5% (seasonally adjusted) – a slightly lower growth rate than in the first couple of quarters. The slowdown in China’s economy might have also adversely affected the growth of Australia’s GDP. Australia is among the leading countries in exporting commodities including as oil and metal ores; if the GDP growth rate will fall again, it could affect the direction of Australia dollar (see here last report);

Wednesday, March 6th

09:45 –Governor King speaks: Bank of England’s Governor will testify about banking standards  of England before Parliamentary Committee; he may also offer some insight regarding the upcoming MPC monetary policy meeting; this speech may influence British Pound traders;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the upcoming U.S non-farm payroll change for February 2013 in anticipation for the upcoming no-farm report to be published by Friday;

14:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will announce its decision on the Canadian overnight rate, which remained unchanged in recent years at 1%. The BOC may continue its policy and maintain its interest rate at 1%; the recent slowdown in Canada’s economy might prompt BOC to reduce the rate;

15:00 – U.S Factory Orders: This report will present the changes in U.S. factory orders of manufactured durable goods during February; in the previous report factory orders rose by 1.8%; this report will offer some insight to the developments of the U.S economy and could affect the direction of the U.S dollar;

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 March 1st; in the recent update for February 22nd, stockpiles fell again by 5.9 ml bl to reach 1,784.7 ml bl.

02:30 – Australian Trade Balance: The report will pertain to January 2013. In the recent update, regarding December, the seasonally adjusted balance of goods and services contracted its deficit to $427 million. The export of non-monetary gold fell by $274 million; if the gold exports will continue to decline in January, it might suggest a drop in demand for non-monetary gold (see here last report);

Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement: Bank of Japan will publish its interest rate and monetary policy for March. The news of the nomination of BOJ governor may have contributed to the movement of the Yen. In the recent meeting, BOJ left the interest rate flat at 0 to 0.1 percent and didn’t change its asset purchase plan. If BOJ will further expand its monetary policy, this could keep weakening the yen;

Thursday, March 7th

08:00 – Swiss National Bank Foreign Currency Reserve: The Bank will come out its current Foreign Currency Reserve; based on the previous update, the forex reserves rose compared to the previous week;

Tentative – Spanish 10 Year Bond Auction: the Spanish government will issue its monthly with bond auction; in the latest bond auction, which was held at the penultimate week of February, the average rate reached 5.2% – the lowest rate in the past several months;

Tentative – French 10 Year Bond Auction: the French government will have monthly bond auction; in the recent bond auction, which was held during the first week of February, the average rate reached 2.3% – the highest rate in months;

09:00 – SNB Chairman Jordan’s Speech: the Swiss National Bank Chairman will publicly speak regarding the 2012 Annual Result of the Swiss National Bank, in Zurich; if he will announce or imply of any change to the monetary policy of the SNB it could affect the Swiss Franc;

12:00 –BOE Rate Decision & Asset Purchase Plan: Bank of England will announce its basic rate as of March 2013 and of any changes to its asset purchase pogrom; as of February BOE left rate flat at 0.5% and the asset purchase plan s at £375 billion;

12:45 – ECB Rate Decision: The last time ECB lowered its cash rate was back in July 2012 – by 0.25pp to 0.75%. The economic slowdown in Europe including the drop in inflation and rise in unemployment is likely to raise chances of ECB lowering the rate again in the near future. Nonetheless, the current expectations are that ECB President won’t lower the rate in this upcoming meeting. If, however, Mario Draghi will hint of a potential future cut, this could cause a reaction in the forex markets;

13:30 –American Trade Balance: This monthly update for January will show 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; based on the recent American trade balance report regarding December the goods and services deficit declined during the month to $38.5 billion;

13:30 – Canadian Trade Balance: In the latest report regarding December 2012, exports declined by 0.9% and imports also fell by 2.8%; as a result, the trade deficit contracted from a $1.7 billion deficit in November to $901 million deficit in December; this report may affect the Canadian dollar which tends to be strongly linked with rates of commodities;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will pertain to the developments in the initial jobless claims for the week ending on March 1st; in the recent report the jobless claims fell by 22k to reach 344k; this upcoming 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 report of the U.S. natural gas market will pertain to the latest developments in natural gas production, storage, consumption and rates as of March 1st; in recent weekly report, natural gas storage declined by 171 Bcf to 2,229 Bcf;

00:50 – Japan’s GDP Fourth Quarter 2012: This quarterly report will pertain to the Japan’s GDP growth rate for Q4 2012. In Q3 2012, the GDP contracted by 0.9%; if the GDP growth rate will decline again, it could affect the direction of Japanese yen;

00:50 – Japan Current Account: this report will present the changes in the difference between exports and imports for Japan during last month; this news may affect the strength of the Yen;

Tentative –China’s Trade Balance: as of the previous monthly update, China’s trade balance fell to a $29.2 billion surplus; if the surplus will further dwindle, it could indicate that China’s economic growth is slowing down and thus may adversely affect prices of commodities.

Friday, March 8th

08:15 – Swiss Inflation: this report will show to the monthly changes in the Swiss consumer price index as of February 2013; in the recent report regarding January the CPI slipped by 0.3%;

13:30 – Canada’s Employment Report: In the previous employment update for January 2013, unemployment edged down to 7%; the employment fell by 22k during the month. The upcoming report might affect the Canadian dollar and consequently commodities;

13:30 – China’s CPI: during January, the Chinese inflation rate rose to an annual rate of 2%; this rate is well below China’s inflation target of 4% in annual terms. If the inflation will continue decline, it could indicate that China’s economic progress isn’t expanding; China is among the leading countries in importing commodities such as gold and oil;

13:30 – U.S. Non-Farm Payroll Report: in the recent report for January 2013, the labor market expanded again: the number of non-farm payroll employment increased by 157k; the U.S unemployment rate remained 7.9%; if in the upcoming report the employment will increase again by well above 120 thousand (in additional jobs), this may lower the chances of the Fed augmenting its monetary policy; this report may affect not only the U.S dollar, but also precious metals (see here my last review on the U.S employment report);

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