Weekly Outlook of Financial Markets for September 2-6

Last week, leading commodities prices mostly increased, while the USD mostly depreciated against leading currencies. The slow movement in the forex and commodities markets might pick up as we are exiting the summer slowdown. In the upcoming week several reports and decisions will unfold and may affect commodities, equities and forex markets; these include: U.S non-farm payroll report, Spain’s employment report, U.S non-manufacturing PMI, Australia’s GDP for second quarter, China’s manufacturing PMI, BOJ monetary policy meeting, U.S, Australia and Canada’s trade balance reports, U.S manufacturing PMI, German factory orders, Bank of England rate decision, GB manufacturing PMI, ECB rate decision, and U.S. jobless claims. Here is an economic outlook for the week of September 2nd to September 6th regarding the U.S, Japan, China, Euro Area, Australia, Canada, and Great Britain.   

(All times GMT):

Monday, September 2nd

02:00 – China Manufacturing PMI (final estimate): Last month’s Manufacturing PMI reached 47.7 – i.e. China’s manufacturing sectors was contracting at a faster pace; the recent flash PMI report was reached 50.1 in August – the highest level in four months. If in the upcoming report the PMI will remain above the 50 point mark, it could signal a rise in China’s economic progress. If the index will increase, this may also positively affect leading commodities prices;

09:30 – GB Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in August 2013. In the last update regarding July 2013 the index increased again to 54.6. This rate gain means the manufacturing sector is expanding at a faster pace; this index might affect GB Pound;

Tuesday, September 3rd

00:30 – Australian Retail Sales: This monthly report will refer to July 2013. In the previous update, the seasonally adjusted retail sales remained unchanged during June; this news may affect the Aussie dollar, which tends to be linked with commodities prices;

05:30 – Reserve Bank of Australia – Cash Rate Statement: In the previous rate decision of RBA, it had reduced its cash rate by 0.25 pp to reach 2.50% – its lowest level in years, which contributed to fall of the Aussie dollar. The current expectations are that RBA will keep the interest rate unchanged – this will keep the Aussie weak against leading currencies;

08:00 – Spain’s unemployment Change: the number of people unemployed in Spain fell again in July by 64.9k. This mean, the employment situation in Spain has slightly improved. If in the upcoming report the number of unemployed will decline again, this may pressure up the Euro;

09:30 – GB Construction PMI:Great Britain’s construction sector in July 2013 improved again as the PMI sharply increased to 57 – the construction sector is growing at a faster rate. The upcoming report will refer to August;

15:00 – U.S. Manufacturing PMI: This report will pertain to August 2013. In July, the index sharply rose to 55.4%; this means the manufacturing is expanding; this index may affect foreign exchange rates, crude oil and natural gas markets;

Wednesday, September 4th

02:30 – Australian GDP Second Quarter 2013: This quarterly report will pertain to the Australia’s GDP growth rate for the second quarter of 2013. In the first quarter of 2013, the GDP grew by 0.6% (seasonally adjusted). Australia is among the leading countries in exporting commodities including as oil, LNG, and metal ores to big economies such as China and Japan ; if the GDP growth rate will rise, it could affect the Australia dollar (see here last report);

09:30 – GB Services PMI: In the last report, this index increased to 60.2%; this index may affect the British Pound’s movement;

13:30 – Canadian Trade Balance: In the latest report regarding June 2013, exports rose by 1.4% and imports increased by 0.6%; as a result, the trade balance’s deficit narrowed from $781 million in May to $469 million in June; this report may affect the Canadian dollar, which tends to be linked with commodities;

13:30 –American Trade Balance: This monthly update for July will show the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; according to the latest American trade balance update regarding June the goods and services deficit contracted to $34.2 billion;

15:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will announce its Canadian overnight rate decision – the rate is currently set at 1%. The BOC may keep its policy and maintain its interest rate at 1%; the economic changes in Canada and the FOMC’s monetary policy might prompt BOC to eventually lower its cash rate;

15:30 – U.S Crude Oil Stockpiles Weekly update: the EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on August 31st;

Thursday, September 5th

02:30 – Australian Trade Balance: Thus upcoming report will refer to July’s figures. In the last update, regarding June, the seasonally adjusted balance of goods and services rose to a $602 million surplus. The export of non-monetary gold increased by $282 million; if the gold exports will continue to rise in July, it might suggest an increase in demand for non-monetary gold (see here latest update);

Tentative – Japan’s monetary policy meeting and press conference: In the upcoming Japanese monetary policy meeting, BOJ members will decide on any changes to the bank’s current asset purchase program. This decision could affect the Japanese yen;

11:00 – German Factory Orders: The upcoming report will pertain to August 2013. In the last update, the factory orders rose by 3.8% during July;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will decide on its basic rate for September 2013; the MPC will also state of any new shifts to its asset purchase pogrom; as of August, BOE kept its rate flat at 0.5% and the asset purchase plan s at £375 billion;

12:45 – ECB Rate Decision: ECB will announce of any changes to its cash rate for September. In the past meetings the ECB left its rate at 0.50%; some suspect Draghi may keep ECB’s monetary policy unchanged in the upcoming meeting. The upcoming German elections are likely to keep ECB’s policy unchanged in the near future. Nevertheless, if ECB will reduce its cash rate, or cut further its deposit rate, the Euro is likely to resume its downward trend;

13:15 – ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the next U.S non-farm payroll changes for August 2013 that will be published on Friday;

13:30 – U.S. Jobless Claims Weekly Report:  this weekly report will refer to the changes in the initial jobless claims for the week ending on August 30th; in the recent report the jobless claims decreased by 6k to reach 331k; this upcoming weekly update may affect the U.S dollar and consequently commodities and stocks markets;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to the shifts in the non-manufacturing sector for August 2013. In the latest update, this index rose to 56% – thus, the non-manufacturing is expanding at a faster rate than in last month; this index may affect the US dollar;

15:00 – U.S Factory Orders: This report will refer the changes in U.S. factory orders of manufactured durable goods during August; in the previous report factory orders increased by 1.5%; this report will offer some insight regarding the developments of the U.S economy;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report about the U.S. natural gas market will pertain to the latest developments in natural gas production, storage, consumption and rates as of August 31st; in latest weekly update, natural gas storage rose by 67 Bcf to 3,130 Bcf;

Friday, September 6th

09:30 – Great Britain Manufacturing Production: This update will show the annual rate of GB’s manufacturing production as of July; in the previous report regarding June 2013 the index rallied by 1.9% (M-2-M); this news may affect the British Pound;

13:30 – U.S. Non-Farm Payroll Report: in the previous employment report for July 2013, the labor market slightly rose: The number of non-farm payroll employment rose by 162k – lower than the number many had anticipated; the U.S unemployment rate slipped to 7.4%; if in the upcoming report the employment will increase again by over 150 thousand (in additional jobs), this may pull down the prices of gold and silver and positively affect the US dollar;

13:30 – Canada’s Employment Report: In the latest employment update for July 2013, unemployment remained inched up to 7.2%; the employment fell by 39.4k during last month. The forthcoming report might affect the Canadian dollar and consequently commodities;

15:00 – Canada’s Ivey PMI: This report shows the diffusion index based on surveyed purchasing managers; in the recent monthly update, the index decreased to 48.4. The report might affect the Canadian dollar.

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