Weekly Outlook of Financial Markets for October 29- November 2

During last week, major commodities prices fell again; this includes oil, natural gas, silver and gold. Will this trend continue this week? The FOMC meeting concluded, as expected, with no changes to the Fed’s monetary policy. Several reports may have affected forex and commodities prices during last week: the U.S new home sales increased again during September; jobless claims fell by 23k to reach 369k; U.S GDP expanded by 2% during the third quarter of 2012, which was slightly higher than many analysts had anticipated. The main events of the week, besides the concerns in the U.S around Hurricane Sandy, will revolve around the U.S non-farm payroll report, U.S manufacturing PMI and BOJ monetary policy meeting. There are several other important publications, speeches and events that may affect the financial markets during this week. These include: U.S factory orders, China’s manufacturing PMI, U.S personal spending, Canada’s GDP, ECB President Speech, and U.S. jobless claims. Here is an economic news calendar projection for October 29th to November 2nd regarding the U.S., Japan, Great Britain, China, Australia, EU, and Canada.   

(All times GMT):

Monday, October 29th

13:30 – U.S Personal Spending: this monthly update refers to the changes in income and outlays in the U.S during September; in the last report regarding August the personal income edged up by 0.1%; disposable personal income also rose by the same rate;

Tuesday, October 30th

Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement: Bank of Japan will publish its interest rate and monetary policy for the November. Up to date, BOJ kept the interest rate unchanged at 0 to 0.1 percent, and hasn’t added any additional funds to its stimulus plan. If the BOJ will introduce a new monetary stimulus plan it could affect the Yen, other currencies and commodities prices;

07:00 – Bank of Japan Outlook Report: Besides the Bank’s rate decision the BOJ will also issue its updated outlook report on the Japanese Economy; this report is issued twice a year and could influence yen traders;

Tentative – Italian 10 Year Bond Auction: the Italian government will issue another bond auction; in the previous bond auction, which was held at the end of September, the average rate reached 6.19%; if the rate will continue to rise, it could indicate a bearish market sentiment toward Euro based investments;

09:00 – ECB President Speaks: Mario Draghi will participate in Macro- Research Network of the European System of Central Banks, to be held in Frankfurt. In anticipation for next week’s ECB rate decision, the ECB President might refer to the monetary policy of the ECB and he’s outtake on the future steps of the ECB in relation to Spain’s debt problems. This speech might affect the Euro to US dollar currency pair;

15:00 – U.S Consumer Confidence: according to the recent monthly report, the consumer confidence index rose in September (M-o-M). The current expectations are that the October index may fall; this report might affect commodities markets including the oil and natural gas markets;

Wednesday, October 31st

08:00 – German Retail Sales: This monthly report will show the changes in German retail sales during October. In September 2012, retail sales rose by 0.3%; if this report will return to be negative then it might weaken the Euro;

10:00 – Euro Area unemployment rate: the rate of unemployment of the Euro Area edged up again to 11.4% in August. This mean there wasn’t any significant shift in the unemployment. If in the upcoming report there will be a sharp change in unemployment, it may affect the Euro;

13:30 – Canada’s GDP by Industry: the report will show the developments in major industrial sectors during August 2012. In the previous report regarding July 2012, the real gross domestic product edged up by 0.1%. This report may affect the strength of the Canadian dollar currency which is strongly linked with commodities;

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 October 26th; in the previous weekly update for October 19th, stockpiles rose by 3.9 million bl to 1,793 ml bl;

02:00 – China Manufacturing PMI: According the recent report regarding September 2012 the Manufacturing PMI rose to 49.8; this means that China’s manufacturing sectors continues to contract but at a slower pace than in the previous month; if the index will rise again and even pass the 50 mark, this may positively affect commodities prices;

15:00 – U.S. Manufacturing PMI: This report will refer to the monthly changes in the manufacturing sector on a national level for October 2012. During September 2012 the index rose to 51.5%, which means the manufacturing is growing; this index may affect forex, crude oil and natural gas markets;

Thursday, November 1st

09:30 – GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector status in October 2012. In the recent report regarding September 2012 the index fell to 48.4%. This rate means the manufacturing sector is contracting at a faster pace; this index might affect GB Pound;

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 October 2012 in anticipation for the upcoming no-farm report to be published by Friday;

13:30 – U.S. Jobless Claims Weekly Report:  this report will pertain to the weekly developments in the initial jobless claims for the week ending on October 27th; in the previous report the jobless claims declined by 23k to 369,000; this upcoming weekly report may affect the U.S dollar and consequently the prices of commodities;

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 shifts in natural gas production, storage, consumption and rates as of October 12th; in the last weekly report, natural gas storage increased by 67 Bcf to 3,843 Bcf;

17:30 – FOMC member Lockhart‘s Speech: the FOMC member will talk in Chattanooga Downtown Rotary Convention and Trade Center;

Friday, November 2nd

Tentative – French 10 Year Bond Auction: the French government will issue a bond auction; in the previous bond auction, which was held at the beginning of September, the average rate reached 2.28%;

13:30 – Canada’s Employment Report: In the recent employment report for September 2012, unemployment rose by 0.1 pp to 7.4%; the employment grew by 52k during last 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 September 2012, the labor market expanded by a higher than expected rate: the number of non-farm payroll employment rose by 114k; the U.S unemployment rate fell to 7.8%; if the upcoming report will continue to show growth of above 110 thousand (in additional jobs), this may lower the chances of the Fed introducing additional stimulus plan by the end of the year; 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);

15:00 – U.S Factory Orders: This report will refer to the shifts in U.S. factory orders of manufactured durable goods during September; in the previous report factory orders declined by 5.2%; this report will offer some insight to the growth of the U.S economy and could affect the path of the U.S dollar;

For further reading: