Weekly Outlook of Financial Markets for October 1-5

During the previous week, the prices of bullion shifted with an unclear trend as the recent developments in Spain, Greece and Italy continued to pose uncertainty in the Euro Area. Further, the mixed signal about the progress of the U.S economy, e.g. the low growth in U.S GDP in Q2 while U.S jobless claims fell to 359k, may have also contributed to the mixed trend in commodities and forex markets.  The FOMC decision to launch QE3 is likely to resurface this week as Bernanke is set to give a speech on the monetary policy of the Fed and the minutes of the recent FOMC meeting will be published. There are several important publications, speeches and events that may affect the financial markets during this week. These include: U.S non-farm payroll report, Bernanke’s speech, ECB, BOJ, RBA and Bank of England rate decision, U.S manufacturing PMI, EU unemployment rate and U.S. jobless claims. Here is an economic news calendar outlook for October 1st to October 5th regarding the U.S., GB, Japan, Australia, EU, and Canada.   

(All times GMT):

Monday, October 1st

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector status in September 2012. In the recent report regarding August 2012 the index rose to 49.5%. This rate means the manufacturing sector is contracting at a slower pace; this index might affect GB Pound;

10:00 – Euro Area unemployment rate: the rate of unemployment of the Euro Area edged up to 11.3% in July. This mean there wasn’t any significant changes in the unemployment. If in the upcoming report there will be a sharp change in unemployment, it could affect the Euro;

15:00 – U.S. ISM Manufacturing PMI: This report will refer to the monthly changes in the manufacturing sector on a national level for September 2012. During August 2012 the index edged down to 49.6%, which means the manufacturing is still contracting; this index may affect forex, crude oil and natural gas markets;

17:30 – Bernanke’s Speech: Following the recent decision of the FOMC to launch another quantitative easing plan monetary intervention, many will look towards Bernanke’s speech that could hint of the Fed’s future monetary steps.  The Chairman of the Federal Reserve will talk at the Economic Club of Indiana, in Indianapolis. The title of the speech is ““Five Questions about the Federal Reserve and Monetary Policy”;

Tuesday, October 2nd

05:30 – Reserve Bank of Australia – Cash Rate Statement: the overnight money market rate of Australia’s Reserve Bank remained unchanged at 3.5%, which is still the lowest level since the end of 2009. If the RBA will decide to lower the rate again, this news may affect the Australian dollar that is strongly correlated with commodities prices;

Tentative – Great Britain 10 Year Bond Auction: the British government will issue a bond auction; in the recent bond auction, which was held at the second week of September, the average rate reached 1.83%;

2:30 – Australian Trade Balance: The upcoming report will refer to August 2012. In the previous report, the seasonally adjusted balance of goods and services expanded its deficit to $556 million in July. The export of non-monetary gold fell by $420 million (25%); if the gold exports will continue to fall in August, it might suggest a decrease in demand for non-monetary gold (see here last report);

Wednesday, October 3rd

13:15 – ADP estimate of U.S. non-farm payroll: ADP will publish its estimate for the upcoming U.S non-farm payroll change during September 2012 in anticipation for the upcoming no-farm report to be published by Friday;

15:00 – U.S. ISM Non-Manufacturing PMI: This report will present the developments in the non-manufacturing sector during September 2012. During August 2012 this index rose to 53.7% – this means the non-manufacturing is expanding and at a slightly faster rate than in the previous month; this index may affect forex and commodities trading;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on September 28th; in the previous weekly update for September 21st, stockpiles declined by 2.6 million bl to 1,798 million bl;

02:30 – Australian Retail Sales: This monthly report will present the developments in Australia’s retail sales during August 2012. The retail sales (seasonally adjusted) fell by 0.8% in July; this news may affect the strength of the Aussie dollar;

Thursday, October 4th

Tentative – French 10 Year Bond Auction: the French government will also issue a bond auction; in the recent bond auction, which was conducted during the first week of September, the average rate reached 2.21%;

12:00 – Great Britain Bank Rate & Asset Purchase Plan: Bank of England will decide on its basic rate for October 2012 and of any shifts in its asset purchase plan; as of September BOE’s rate remained unchanged at 0.5% and the asset purchase plan was left at £375 billion;

12:45 – ECB Press Conference and Euro Rate Decision: The last time the ECB decided to cut the rate was back in July when President of ECB, Mario Draghi announced the EU interest rate will be reduced by 0.25pp to 0.75%; in September, the interest rate remained unchanged. Since many EU countries are still struggling, and since the FOMC decided on QE3, ECB might decide to make another rate cut in the near future by another 0.255pp. If ECB will cut the rate again, it may affect the Euro to US dollar exchange rate;

13:30 – U.S. Jobless Claims Weekly Report:  this update will refer to the weekly changes in the initial jobless claims for the week ending on September 21st; in the latest report the jobless claims declined by 26k to 359,000; this upcoming weekly report may affect the U.S dollar and consequently the rates of 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 recent developments in natural gas production, storage, consumption and rates as of September 28th; in the previous weekly report, natural gas storage rose by 80 Bcf to 3,576 Bcf;

19:00 – Minutes of September’s FOMC Meeting: Following the recent FOMC meeting, in which it was decided to launch QE3, and to extend the Fed’s pledge of keeping the short term rates low until mid-2015, the bullion market reacted to this news – gold and silver prices hiked on the day of the announcement. The minutes of the recent FOMC meeting might add some additional perceptive and insight behind this decision and the future steps of the FOMC especially in anticipation of the upcoming FOMC meeting at the end of October;

Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement: Bank of Japan will announce its interest rate and monetary policy for the October. Up to now, BOJ left the interest rate unchanged at 0 to 0.1 percent, but expanded its stimulus plan by additional 10 trillion yen. If the BOJ will introduce a new monetary stimulus plan (which is less likely), it could affect the Yen, other currencies and commodities rates;

Friday, October 5th

13:30 – Canada’s Employment Report: In the recent employment report for August 2012, unemployment remained at 7.3%; the employment rose by 34k during the month. The upcoming report might affect the Canadian dollar and consequently the prices of oil and natural gas;

13:30 – U.S. Non-Farm Payroll Report: in the recent report for August 2012, the labor market expanded by a lower than expected rate: the number of non-farm payroll employment rose by 96k; the U.S unemployment rate slipped to 8.1%; if the upcoming report will continue to show little growth of below 120 thousand (in additional jobs), this may raise the chances of the Fed introducing additional stimulus plan in the near future; this report may affect not only the U.S dollar, but also commodities prices (see here my last review on the U.S employment report);

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