Weekly Outlook of Financial Markets for October 15-19

During last week, the major commodities prices remained nearly unchanged. Several reports that may have affected forex and commodities prices: the U.S PPI rose by 1.1% during September; U.S jobless claims dropped by 30k to 339k. These news items may have contributed to movement of the USD against other major currencies, and consequently bullion rates. There are still speculations regarding the next moves of Spain and Greece. Perhaps the upcoming EU Summit will shed some light on these nations’ debt problems. There are several important publications, speeches and events that may affect the financial markets during this upcoming week. These include: U.S consumer price index, Euro summit, China’s GDP, U.S retail sales, minutes of recent MPC meeting, Philly Fed index, FOMC members’ speeches, Canadian core CPI, and U.S. jobless claims. Here is an economic news calendar projection for October 15th to October 19th regarding the U.S., Great Britain, China, Australia, EU, and Canada.   

(All times GMT):

Monday, October 15th

02:30 – China’s CPI: during July 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 to be low it could indicate that China’s economic progress isn’t pulling up; China is among the leading countries in importing commodities such as gold and oil;

13:30 –U.S. Retail Sales Report: this report will show the monthly developments in the retail sales and food services for September 2012; in the previous report regarding August, the retail sales increased by 0.8% from the previous month; gasoline stations sales increased by 5.5% in August compared to July; this report could signal the changes in U.S’s gasoline demand and thus may affect crude oil prices;

15:30 – BOC Business Outlook Survey: this quarterly report provides an analysis of Canada’s businesses and offers some insight of what is up ahead for Canada;

17:45 – FOMC member Lacker’s Speech: the FOMC member will talk about his outlook for U.S economy;

00:30 – Minutes of Australia’s Bank Monetary Policy Meeting: The minutes of the last monetary policy meeting of the Reserve Bank of Australia will refer to the main factors that affected the board’s decision to lower the rate by 25pp to 3.25%; the minutes of this meeting may affect the Australian dollar exchange rate and consequently commodities prices including crude oil and gold rates;

01:30 – FOMC member Williams Talks: The title of the speech is “A Perspective on the Economy“;

Tuesday, October 16th

09:30 – Great Britain CPI: this report will pertain to the yearly rate of GB’s consumer price index as of September 2012; some expect the August inflation will further decline; in the recent report regarding August the annual CPI decreased from 2.6% to 2.5%; this news may affect the British pound;

10:00 –German ZEW economic sentiment: The upcoming publication will refer to the ZEW indicator of economic sentiment for Germany for October. For September the ZEW indicator for Germany rose by 7.3 points to -18.2 points; if Germany’s economic sentiment won’t show signs of improvement, the Euro will plausibly remain weak against other currencies;

Tentative – BOE Inflation Estimate: this report will show the yearly rate of GB’s inflation according to Bank of England and will be published as a letter only if the inflation is above 3% or below 1%;

13:30 –U.S Core Consumer Price Index: This monthly report will refer to the main changes in the core consumer price index for September 2012. According to the U.S Bureau of Labor statistics during August, the CPI rose by 0.6%(M-o-M); the core CPI rose by 0.10%; the core index rose over the last 12 months by 1.9%;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital report will show the shifts in the purchases and sales of US long term treasuries in August 2012. In the previous report regarding July 2012, the net foreign sales of U.S Treasuries longer-term notes reached $67 billion;

Wednesday, October 17th

09:30 – Claimant Count Change: This report will present the changes in the number of unemployed in GB; as of last month’s reports this figure had declined by 15k;

09:30 – MPC Meeting Minutes: in the latest MPC meeting it was announced the rate will remain at 0.5% and the asset purchase program at £375 billion; the MPC still has concerns regarding GB’s inflation. The minutes of the previous meeting might offer some insight behind this decision;

13:30 – U.S. Housing Starts: the U.S Census Bureau will publish the U.S housing starts report for September 2012; this report was historically correlated with gold price – as housing starts rise, gold prices tended to decline the next day (even when controlling to the U.S dollar effect); in the previous report, the adjusted annual rate reached 733,000 in August 2012, which was 2.3% above July’s  rate;

13:30 – U.S. Building Permits: The recent report building permits fell by 1% (M-o-M) in the adjusted annual rate of building permits and reached 803,000 in August 2012. If this report will continue to fall in the building permits rate, it may indicate that the U.S housing market (from this aspect) isn’t pulling up(the recent U.S building permits update);

15:30 – U.S Crude Oil Stockpiles Report: 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 October 5th; in the recent weekly update for October 5th, stockpiles declined again by 4.3 million bl to 1,792 million bl;

03:00 –China Third Quarter GDP 2012: during the second quarter of 2012, China expanded by only 7.6% in annual terms; the current expectations are that the Q3 2012 grew in annul terms may even further fall; if the growth rate will be lower than in the previous quarter it might adversely affect commodities prices;

Thursday, October 18th

All Day – EU Economic Summit: there will be a two day EU economic Summit, in which the European leaders will talk about the recent financial developments related to the EU debt crisis. In the Summit the members may talk about Spain’s debt crisis. Perhaps Spain will make its official request for aid in this Summit. If there will be big headlines from this Summit it may have some effect on the financial markets;

09:30 –Retails Sales GB (September 2012): This report examines the changes in the retails sales in Great Britain during September 2012. It may affect the direction of the British Pound currency. In the recent report regarding August 2012, retails sales edged down by 0.2%;

Tentative – Spanish 10 Year Bond Auction: the Spanish government will issue another bond auction; in the recent bond auction, which was held at the third week of September, the average rate reached 5.67% – the lowest rate in recent months; if Spain’s new auction will continue to show low rates, it could lower the chances of Spain making the request for aid from ECB in the near future (although, I still think its only a matter of time before Spain will make the formal request for aid);

13:30 – U.S. Jobless Claims Weekly Report:  this report will refer to the weekly shifts in the initial jobless claims for the week ending on September 28th; in the latest report the jobless claims fell by 30k to 339,000; this upcoming weekly update may affect the U.S dollar and consequently the prices of commodities;

15:00 – Philly Fed Manufacturing Index: This monthly survey presents an estimate for the developments of the US manufacturing conditions. In the recent September survey, the growth rate rose from -7.1 in August to -1.9 in September. If the index will remain negative it may adversely affect not only U.S Dollar but also American stock indexes, and commodities 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 pertain to the recent news in natural gas production, storage, consumption and rates as of October 5th; in the previous weekly update, natural gas storage rose by 72 Bcf to 3,725 Bcf;

Friday, October 19th

13:00 – Canada’s CPI: This report will refer to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for September 2012. According to the Canadian CPI report for August 2012, the CPI rose by 1.2% during the past 12 month up to August – this is a slightly lower rate than in July. This report might affect the Canadian dollar, which is also strongly correlated with commodities prices;

15:00 – U.S. Existing Home Sales: This report will pertain to the changes in U.S. existing home sales for September 2012; in the previous report regarding August 2012 the number of homes sold rose: the seasonally adjusted annual rate of 4.82 million home sales; if this trend will continue it may help rally the U.S dollar.

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