Weekly Outlook for May 14 – 18

Following the results of the French and Greek election the market reacted to this news as the Euro declined during the week and dragged along with it other currencies such as the Aussie dollar and also commodities prices such as oil and gold.  This week several bond auctions will be held that could affect the Euro and signal the market sentient towards the current situation in Europe. There are several other speeches, reports and news items that may affect the financial markets including: U.S core CPI report, the minutes of the last Australian monetary policy meeting, speech of ECB President Draghi, Japan and Euro Area’s GDP report, Germany ZEW economic sentiment, Philly Fed index and U.S. jobless claims. Here is an economic news calendar forecast for May 14th to May 18th referring to the U.S., EU, Japan, Canada, Great Britain and Australia.   

(All times GMT):

Monday, May 14th

10:00– Euro Area Industrial Production: This report will present the changes in the industrial production of the EU during March; in the previous report the EU industrial production was up by 0.5% (M-O-M) during February;

16:45 – SNB Chairman Jordan’s Speech: the Swiss National Bank Chairman will hold a press conference; if he will announce of a sharp shift in the monetary policy of the SNB it could affect the Swiss Franc;

Tentative – Italian 10 Year Bond Auction: the Italian government will issue a bond auction; the previous bond sales, which were held at the last week of April, went well as the rate reached 5.84%;

12:30 – Monetary Policy Meeting Australia’s Bank: The minutes of the monetary policy meeting of the reserve bank of Australia presents the main factors that affected the board’s decision to cut the basic interest rate by 0.5 percent points to 3.75%; the minutes of this meeting may affect the Australian dollar currency and consequently major commodities prices including crude oil and gold prices;

Tuesday, May 15th

10:00 –Euro Area ZEW economic sentiment: The upcoming publication will refer to the ZEW indicator of economic sentiment for Euro Area for May 2012. For April 2012 the ZEW indicator for Euro Area rose to 13.1;

10:00 –German ZEW economic sentiment: The upcoming publication will refer to the ZEW indicator of economic sentiment for Germany for May. During April the ZEW indicator for Germany slightly rose to 23.4; as Germany’s economy is keep showing progress, the Euro will plausibly remain strong against other currencies;

10:00– Euro Area GDP 1Q2012 Report: Germany France and Italy will also publish during the day their preliminary first quarter GDP report for 2012. This report will present the developments in the economic growth in these countries; Euro Stat will also publish the GDP growth rate of the Euro Area. According to the previous report, during the fourth quarter of 2011, the Euro Area GDP contracted by 0.3% (Q-o-Q). This news might affect the Euro; the current expectations are of another a low growth rate or even another contraction for the first quarter; if there will be another contraction then technically it will mean Euro Area is in a recession;

13:30 –U.S Core Consumer Price Index: This monthly report will refer to the main changes in the core consumer price index for April 2012. In the latest U.S PPI report the PPI declined by 0.2% (mainly due to the drop in oil prices), while the core PPI rose by 0.2%. This might suggest the same could be for the upcoming CPI report.  According to the U.S Bureau of Labor statistics during March 2012, the CPI rose by 0.3% (M-o-M) and also increased over the last 12 months by 2.9%; the core CPI rose last month by only 0.2%;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital report will show the main changes in the purchases and sales of US long term treasuries in March 2012. In the previous report regarding February 2012, the net foreign sales of U.S Treasuries longer-term notes reached $10.1 billion;

Wednesday, May 16th

Tentative – German 10 Year Bond Auction: the German government will issue a bond auction;

10:00 – Euro Area Annual Inflation (April): the inflation in Euro Area reached 2.7% in March (flash report), i.e. it remained unchanged from February 2012. the flash report for April the inflation rate edged down to 2.6%; If the upcoming inflation rate estimate will confirm the flash report’s figure, it may raise the chances of an additional ECB interest rate reduction in the next ECB rate decision or issuing another LTRO program or resuming the securities markets programme (SMP);

10:30 –Bank of England’s Governor King speaks: The governor of Bank of England will speak in a press conference and his speech could offer some insight to the recent BOE interest rate decision and monetary policy; this speech may affect the British Pound trading;

10:30 –BOE Inflation Report: Bank of England will publish its quarterly inflation report; this report may affect the British Pound; in the previous report the inflation sharply fell from its peak in late 2011;

13:30 – U.S. Housing Starts: the U.S Census Bureau will report on the U.S housing starts for April 2012; this report was historically correlated with gold price – as housing starts fell, gold prices tended to rise the following day (even when controlling to the U.S dollar effect); in the previous update, the adjusted annual rate reached 654,000 in March 2012, which was 5.8% below February’s rate of 694,000;

13:30 – U.S. Building Permits: The previous report building permits increased by 4.5% (M-o-M) in the adjusted annual rate of building permits and reached 747,000 in March 2012. If this report will continue to show strength in the building permits rate, it may indicate that the U.S housing market (from this aspect) is slowly recovering (the recent U.S building permits and housing starts review);

15:00 – ECB President Draghi Speaks: Following the ECB rate decision to keep the policy unchanged and the interest rate at 1% the President of the European Central Bank, Mario Draghi will talk in the  European Central Bank colloquium; the title of his speech is “Monetary Policy in Unconventional times“;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on May 11th; in the previous weekly report for May 4th, stockpiles rose by 1.5 million bl to 1,767.05 million bl;

19:00 – FOMC Meeting Minutes: Following the recent FOMC meeting, in which it was decided to keep the monetary policy unchanged, the market didn’t react to this news as gold and silver prices only slightly rose. The minutes of the FOMC meeting might bring some insight behind this decision regarding the future steps of the FOMC;

23:50– Japan’s Preliminary GDP 1Q2012: Japan continues to demonstrate weakness as its gross domestic product shrunk by 0.6% during the fourth quarter of 2011, but expanded by 1.5% during the third quarter of 2011 (in annul terms). The steps taken by BOJ to jumpstart the economy don’t seem to positively affect much Japanese economy for now. This news could affect the strength of the Japanese Yen;

Thursday, May 17th

Tentative – Spanish 10 Year Bond Auction: Spain will issue a bond auction; following the ongoing economic slowdown and the perils Spain is facing from economic perspective, this bond sale may signal the confidence of traders in the Spanish economy and thus may affect the Euro Market;

13:30 – U.S. Department of Labor– Jobless Claims Weekly Update:  this update will refer to the weekly developments in the initial jobless claims for the week ending on May 12th; in the previous report the jobless claims edged down to 367,000; this upcoming weekly update may affect the direction of the U.S dollar and consequently commodities;

15:00 – Philly Fed Manufacturing Index: This monthly survey presents an estimate for the developments of the US economy as it measures the manufacturing conditions. In the previous April survey, the growth rate moderately declined from +12.5 in March to +8.5 in April 2012. If this trend will continue this index may adversely affect not only U.S Dollar but also American stock indexes, oil and gold prices (the recent Philly Fed review);

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and price as of May 11th; in the previous report, natural gas storage increased by 30 Bcf to 2,606 Bcf; if the natural gas storage will keep rising as a slower than normal pace, it may help sustain the recent rally of U.S natural gas prices in the near future;

Friday May 18th

Tentative – GB 10 Year Bond Auction: the Great Britain government will also issue a bond auction; in the previous auction back from April 3rd the actual rate reached an interest rate of 2.22;

13:00 – Canada’s Core CPI: This report will pertain to the core consumer price index for April 2012 and controlling the volatile components such as energy, fruit and vegetables. According to the Canadian CPI report for March 2012, the CPI increased by 1.9% during the past 12 month up to March – this is a lower rate than in February; the core CPI excluding food and energy rose by 1.9% from March 2011 to March 2012. This report might affect the path of Canadian dollar, which is also strongly correlated with commodities prices;

All Day – G8 Meeting: this meeting will be held over the weekend (Friday and Saturday); if the G8 countries will come up with big headlines from this meeting it may have some effects on the financial markets;

For further reading: