Weekly Outlook of Financial Markets for September 23-27

Despite the high volatility in the commodities markets, gold and silver didn’t do much on a weekly scale as both precious metals rallied; on the other hand, oil and natural gas changed direction and fell during last week. The highly expected FOMC meeting didn’t result in big changes in policy as the FOMC didn’t taper QE3 for now. Perhaps in December the FOMC will announce of a change in policy. I remain skeptic. Until then, many news items and speeches will unfold during the week including: U.S core durable goods report, China manufacturing PMI,  ECB president speech, U.S consumer confidence, U.S’s GDP second quarter estimate, Germany’s manufacturing PMI, U.S pending and new home sales, German business climate, and U.S. jobless claims. Here is a breakdown for the week of September 23rd to September 27th referring to U.S, China, Euro Area,  Canada, and Great Britain. 

(All times GMT):

Monday, September 23rd

German Federal Elections: The elections for the German Federal Parliament will take place. If the incumbent Chancellor Merkel remains in office along with its party, this news won’t stir up the forex markets across Europe;

02:45 – China Manufacturing PMI (flash): This is HSBC’s flash manufacturing PMI survey for September. Last month’s report regarding August 2013 the Manufacturing PMI rallied to 50.1 – i.e. China’s manufacturing sectors is expanding. If in the upcoming report the PMI continues to rise, it could signal growth in China’s economy. This may also positively affect commodities prices.

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the latest monthly report regarding August 2013, the France’s PMI slipped to 49.7 i.e. the manufacturing conditions are contracting at a slightly faster pace. This report serves signals the changes in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

14:00 – ECB President Speaks: Mario Draghi will testify on EU’s economy at the quarterly hearing of the Committee on Economic and Monetary Affairs, in Brussels. If Draghi provides in this hearing some insight behind ECB’s monetary policy and future steps, this testimony could affect the Euro;

16:15 – SNB Chairman Jordan’s Speech: The Swiss National Bank Chairman will give a speech; if he announces or implies of any potential changes to the monetary policy of the SNB it could affect the Swiss Franc;

Tuesday, September 24th

09:00 – German Ifo Business Climate Index: This index comprises the shifts (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of September. In the previous report regarding August 2013, the business climate index rose from 106.2 in July to 107.5 in August; if this trend persists, it might positively affect the Euro;

13:30 – Canada Retails Sales (July 2013): This report will refer to the retails sales in Canada as of July. In the previous report regarding June 2013, retails sales fell by 0.8%;

15:00 – U.S Consumer Confidence: Based on the latest monthly report, for August, the consumer confidence index bounced back and rose to 81.5 (month-over-month). The current expectations are that the September index may keep rising; this report might affect commodities prices including the oil and natural gas;

Wednesday, September 25th

07:00 – Gfk German Consumer Climate Survey: This survey projects Germany’s consumers’ economic climate (past and future economic conditions – on a monthly basis) for September. In the latest report for August 2013, the climate index slightly fell to 6.9;

13:30 – U.S Core Durable Goods: This report will pertain to August 2013. This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of July 2013, new orders of manufactured durable goods declined to $485 billion; if this report shows another drop in new orders, then it could pull down not only the USD but also commodities prices;

15:00 – U.S. New Home Sales: This report will refer to August 2013; in the recent report (opens pdf; for July), the sales of new homes sharply fell to an annual rate of 394,000 – a 13.4% drop (month- over-month); if the number of home sales keep falling, this may suggest the housing market in the U.S is cooling down; this news may also affect the US dollar;

15:30 – U.S Crude Oil Stockpiles Weekly Report: 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 September 20th; the shifts in stockpiles could affect the path of crude oil price in the U.S; 

Thursday, September 26th

09:00 – Euro Area Monetary Development: This monthly update will refer to the developments of the M3, M1 and loans to private sector in the Euro area as of August 2013. In the latest July report, the annual growth rate for M3 inched down to 2.2%; M1 declined to 7.1%. Finally, the annual growth rate of loans to private sector reached -1.4%. This news suggests the EU inflation is declining again as loans continue to tumble and the growth rate of M1 and M3 diminishes. The progress of the EU monetary base is likely to affect the ECB rate decisions in the coming months;

09:30 – GB Current Account: This quarterly report will present any changes in the gap between the impost and exports as of the recent quarter. Based on the latest update, the deficit expanded to 14.5 billion pounds.  This report might affect the direction of the British Pound;

13:30 – Last U.S GDP 2Q 2013 Estimate (final): This will be the third and last estimate of U.S’s second quarter 2013 real GDP growth. In the recent estimate the U.S GDP rose by 2.5% in the second quarter of 2013. If in the last estimate, the growth rate for the second quarter is substantially revised, this could affect not only the US dollar but also commodities rates;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly update will pertain to the shifts in the initial jobless claims for the week ending on September 20th; in the latest report the jobless claims rose by 15k to 294k; this upcoming weekly update may affect the U.S dollar and consequently commodities and stocks markets;

15:00 – U.S. Pending Home Sales: This report shows the shifts in pending home sales in the U.S for August; in the recent report, the pending home sales index fell by 1.3% (month-over-month). These data are another signal for the developments in U.S’s housing market; if the housing data shows additional decline in sales, it may pull back the U.S dollar;

15:30 – EIA U.S. Natural Gas Storage Update: The EIA weekly update on U.S. natural gas market will refer to the latest developments in natural gas production, storage, consumption and rates as of September 20th; this news may affect natural gas prices;

Friday, September 27th

08:00 – KOF Economic Barometer: This monthly report estimates the progress of the Swiss economy in the upcoming months;

10:00 – ECB President Speaks: Mario Draghi will give a speech at BocconiUniversity, in Milan. His words could move the markets if they refer to any potential changes in ECB’s policy;

13:30 – U.S Personal spending: This monthly report will pertain to the shifts in income and outlays in the U.S during August; in the last report regarding June the personal income edged up by 0.1%;

14:55 – UoM Consumer Sentiment (revised):University of Michigan will publish its revised consumer sentiment monthly update; this survey could provide information regarding the recent changes in U.S consumers’ sentiment; according to the latest report, the sentiment index decreased to 82.1;

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