Weekly Outlook of Financial Markets for May 6-10

The prices of leading commodities including crude oil and gold moderately rallied during last week. Despite the recent ECB rate cut leading “risk related currencies” such as the Euro and Aussie rose during most of last week.  In the upcoming week several reports, decisions and speeches may affect the financial markets. These include: Bernanke’s speech, Chin’s CPI, Spain’s employment update, Australia’s retail sales, Canada’s employment report, GB manufacturing conditions, G7 Summit, BOE and RBA rate decisions, Japan current account, China’s trade balance, OPEC monthly report, and U.S. jobless claims.  Here is an economic outlook for the week of May 6th to May 10th regarding the U.S, China, Euro Area, Japan, Australia, Canada, and Great Britain.   

(All times GMT):

Monday, May 6th

00:30 – Australian Retail Sales: The upcoming monthly report will refer to March 2013. In the recent report, the seasonally adjusted retail sales increased by 1.3% during February; this news may affect the Aussie dollar;

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain slipped in March by 5k. This mean, the employment situation in Spain hasn’t changed much last month. If in the upcoming report the number of unemployed will rise, this may adversely affect the Euro;

14:00 – ECB President Speaks: Mario Draghi will give a speech at the LUISS Guido Carli, in Rome. He might refer to the recent rate reduction. If Draghi will provide some insight behind the future plans of the ECB’s monetary policy, this speech could affect the Euro;

Tuesday, May 7th

02:30 – Australian Trade Balance: The report will pertain to March 2013. In the previous update, regarding February, the seasonally adjusted balance of goods and services contracted its deficit to $178 million. The export of non-monetary gold fell by $143 million; if the gold exports will continue to dwindle in March, it might suggest a drop in demand for non-monetary gold (see here recent report);

05:30 – Reserve Bank of Australia – Cash Rate Statement: in the past several months, the overnight money market rate of Australia’s Reserve Bank remained flat at 3%, which is still the lowest level since the September 2009. RBA cut the rate four times in 2012 by a total of 1.25pp. If the RBA will decide to reduce its rate again, this news may affect the Australian dollar, which tends to be strongly correlated with commodities;

08:00 – Swiss National Bank Foreign Currency Reserve: The Bank will come out with its Foreign Currency Reserve; based on the recent report, the forex reserves rose compared to the previous month;

11:00– German Factory Orders: This report will pertain to the developments in the factory orders of Germany for March; in the last report the German factory orders rose by 2.3% (M-o-M);

Wednesday, May 8th

Tentative –China’s Trade Balance: according to the recent monthly report, China’s trade balance tumbled down to a $0.9 billion deficit; if the deficit will further rise, it could indicate that China’s economic growth is slowing down and thus may adversely affect prices of commodities.

Tentative – U.S 10 Year Bond Auction: the U.S government will issue its monthly bond auction; in the previous auction, which was held at the second week of April, the average rate reached 1.80% – much lower than in the previous auction;

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on May 3rd; in the latest update for the week ending on April 26th, stockpiles sharply rose by 12.3 ml bl to reach 1,792.2 ml bl.

Tentative – China’s CPI: during March, the Chinese inflation rate rose to an annual rate of 2.1%; this rate is well below China’s inflation target of 4% in annual terms. The sharp drop in inflation is another indication for a slowdown in the economic activity in China. If the inflation will continue fall, it could indicate that China’s economic progress is cooling down; China is among the leading countries in importing commodities such as gold and oil;

Thursday, May 9th

02:30 – Australia Employment Report: in the recent report regarding March 2013 the rate of unemployment rose to 5.6%; the number of employed (seasonally adjusted) fell by 36,100 people. This report could affect the Aussie dollar (see here the recent report);

09:00 – ECB Monthly Bulletin: This monthly report for April examines the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some insight on the projections of the EU growth;

09:30 – Great Britain Manufacturing Production: this report will show the annual rate of GB’s manufacturing production in March; in the previous report regarding February 2013 the index changed course and rose by 0.8% (M-2-M); this news may affect the British Pound;

Tentative – Spanish 10 Year Bond Auction: in the last bond auction, which was held a few weeks back, the average rate reached 4.61%;

12:00 –BOE Rate Decision & Asset Purchase Plan: Bank of England will decide on its basic rate for May 2013; the MPC will also announce of any new changes to its asset purchase pogrom; as of April, BOE left the rate unchanged at 0.5% and the asset purchase plan s at £375 billion;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will refer to the shifts in the initial jobless claims for the week ending on May 3rd ; in the latest report the jobless claims fell by 18k to reach 324k; this forthcoming weekly update 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 recent developments in natural gas production, storage, consumption and rates as of May 3rd; in recent weekly report, natural gas storage rose by 43 Bcf to 1,777 Bcf;

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

Friday, May 10th

Tentative – OPEC Monthly Report: this monthly update will show the changes in crude oil and natural gas’s supply and demand worldwide as of April 2013; this update will also refer to the developments in the production of OPEC countries last month; this news may affect the direction of oil prices;

01:30 – Reserve Bank of Australia – Monetary Policy Statement: The RBA will publish its quarterly report regarding the Bank’s monetary policy;

All Day – G7 Summit: The financial ministers of the leading countries will convene in UK; this two day summit will most likely revolve around the ongoing debt crisis in Europe and other economic global challenges;

13:30 – Canada’s Employment Report: In the recent employment update for March 2013, unemployment rose to 7.2%; the employment fell by 54.5k during the month. The upcoming report might affect the Canadian dollar and consequently commodities;

14:30 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give a speech at the Federal Reserve Bank’s 49th Annual Conference on Bank Structure and Competition, in Chicago. The title of his speech is “Monitoring Finance “. Following the recent FOMC meeting from last week, if the Chairman of Fed will offer  some insight regarding the future steps of the FOMC this could stir up the precious metals market;

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