Financial Market Forecast for February 24-28

The commodities markets continued to recover last week; in the forex market the Euro slightly appreciated against the USD. This week several reports will come out and may affect commodities, equities and forex markets; these include: EU economic outlook, U.S new and pending home sales, U.S GDP for the fourth quarter, EU’s employment report, China’s manufacturing PMI, EU monetary development, U.S consumer confidence, GB GDP for the fourth quarter, oil and gas EIA weekly update, Australia Private New Capital Expenditure and Canada’s GDP. Here is a breakdown for the week of February 24th to February 28th referring to the U.S, Euro Area, China, Canada, Australia and Great Britain.

(All times GMT):

Monday, February 24th

09:00 – German Ifo Business Climate Index: This index comprises of the shifts (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of February. In the last report regarding January 2014, the business climate index slightly increased again to 110.6;

10:00 – EU CPI: Based on the recent report, the CPI slightly fell to an annual rate of 0.8% during December. The changes in EU’s inflation could affect ECB’s monetary policy;

Tuesday, February 25th

10:00 – EU Economic Forecast: The European Commission will issue its quarterly outlook report for the EU economy;

15:00 – U.S Consumer Confidence: According to the last update for January, the consumer confidence index increased to 80.7 (month-over-month). The current expectations are that the February index may rise again; this report might affect the USD;

Wednesday, February 26th

09:00 – Gfk German Consumer Climate Survey: This survey estimates Germany’s consumers’ economic climate (past and future economic conditions – on a monthly basis) for February. In the previous report for January 2014, the climate index rose to 8.2;

09:30 – Second estimate of GB GDP Q4 2013: This report will show the revised estimate of the quarterly growth rate of the British economy for the fourth quarter of 2013; during the third quarter the GB economy grew by 0.8% (Q-2-Q); if the growth rate remains unchanged or very close to the first estimate, it could have little effect on the GB pound;

15:00 – U.S. New Home Sales: This report will refer to January 2014; in the previous report (opens pdf; for December), the sales of new homes fell to an annual rate of 414,000 – a 10% 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;

02:30 – Australia Private New Capital Expenditure: This quarterly update shows the shifts in the private new capital expenditures and expected expenditures for the fourth quarter of 2013. As of the previous quarter, the seasonal adjusted total of new capital expenditure rose by 3.6% (Q-o-Q) but fell by 0.7% compared to last year. If capital expenditures continue to pick up, this trend may positively affect the Aussie dollar;

15:30 – U.S Crude Oil Stockpiles Weekly report: The EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on February 21st; the report will also present the shifts in imports, refinery input and production, which could provide some insight behind the latest shifts in the price of crude oil in the U.S; 

Thursday, February 27th

09:00 – Euro Area Monetary Development: This monthly report will pertain to the developments of the M3, M1 and loans to private sector in the Euro area as of January 2014. In the latest December report, the annual growth rate for M3 fell to 1%; M1 declined to 5.8%. Finally, the annual growth rate of loans to private sector remained at -2.3%. This news suggests the EU inflation is falling again as loans continue to shrink and the growth rate of M1 and M3 declines. The progress of the EU monetary base is likely to affect future ECB rate decisions;

13:30 – U.S Core Durable Goods: This monthly report regarding January may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of December 2013, new orders of manufactured durable goods decreased to $229.3 billion; if this report shows another fall in new orders, then it could pull down not only the USD but also commodities;

13:30 – U.S. Jobless Claims Weekly update:  This weekly report will refer to the developments in the initial jobless claims for the week ending on February 21st; in the recent report the jobless claims fell by 3k to reach 336k; this next weekly report may affect the U.S dollar and consequently commodities and stocks markets;

15:30 – EIA U.S. Natural Gas Storage Update: The EIA weekly report pertains to the U.S. natural gas market; the report presents the latest developments in natural gas production, storage, consumption and rates as of February 21st;

Friday, February 28th

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

10:00 – German Retail Sales: This monthly report will refer to January 2014. In the recent report, the volume of retail trade fell by 2.5% during December;

10:00 – EU CPI Flash Estimate: This index calculates the annual consumer price index of the Euro Area. According to last estimate for January, the annual CPI reached 0.7%, which is still well below the ECB’s target inflation of 2%. If the inflation rate keeps falling, this could indicate the EU economy is shrinking. These developments could influence the ECB members with respect to ECB’s cash rate decision next week;

10:00 – EU Unemployment Rate: Last month’s report showed that the rate of unemployment remained inched down to 12%. The rate remained high and around 12% throughout 2013. If the rate of unemployment remains high, it could adversely affect the Euro;

13:30 – Canada’s GDP by Industry: This monthly report presents the developments in major industrial sectors for December 2013. In the last update regarding November 2013, the real gross domestic product edged up by 0.2%. This report may affect the Canadian dollar, which is strongly correlated with commodities prices such as oil and gold;

13:30 – Second U.S GDP 4Q 2013 Estimate: This will be the second estimate of U.S’s fourth quarter 2013 real GDP growth. In the early estimate, the U.S GDP grew by 3.2% in the fourth quarter of 2013. In the third quarter the GDP grew by 4.1%. If the growth rate in the second estimate rises from the first estimate, this could positively impact not only the US dollar but also commodities prices;

15:00 – U.S Pending Home Sales: This report presents the developments in pending home sales in the U.S during January; in the previous update for December, pending home sales index plunged by 8.7% (month-over-month). This report is another signal for the progress in the U.S housing market; if the index falls again, it may drag down the U.S dollar;

15:30 –BOE Governor Carney Speaks: Governor Carney will participate in a panel discussion at the Symposium on Financial Stability and the Role of Central Bankers, in Frankfurt;

02:00 – China Manufacturing PMI: As of January, the Manufacturing PMI slipped to 50.5 – i.e. China’s manufacturing sectors are expanding at a slower rate. If in the upcoming report the PMI falls again, it could signal slowdown in the growth rate in China’s manufacturing sectors, which could also negatively affect oil and gold prices;

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