After the final week of 2010 is behind us, it’s time to look forward on the first week of 2011 and see what are the main news we should notice that are related to the commodities markets as Crude oil and Natural gas, and precious metals such as Gold and Silver.
Here is a weekly outlook for the week of January 3rd to 7th showing the main news items and reports that will be published this coming week mainly about the US and EURO economies; This forecast will provide some insight on how the prices of major commodities such as oil and gas prices might be affected from these news items. The repots include the following (all times GMT):
- Monday 3rd of January tentative (postponed indefinitely) – Publishing the US Treasury Currency Report by the Department of Treasury:This report which is published twice a year provides information and analysis such as economic policies and economic conditions, on the US and major countries. Last time the report (July 2010) showed that the US is still on a high unemployment rate of 9.5%, however it did show an economic growth of an average 3.5% per quarter (annual basis), which was higher then the weighted-average of 2.4% of the other G7 countries. This report could provide insight into the economic growth and stability of major countries and thus inform us how their condition could affect commodities prices. For the previous report check in this link;
- Wednesday 5th of January– MFI interest rates statistics for euro area: This monthly report shows the changes in MFI interest rates in euro area for household and businesses’ deposits and loans. This upcoming report will refer to the month of November. In the last report on October, it showed that most of MFI interest rates on new deposits didn’t change much from the previous month, while there was mixed development in new loans. This report could help understand how the changes in interest could, consequentially, affect the economic activity in the Euro zone and its demand for commodities such as Crude oil; the report could also show how interest rates could affect the inflation in the Euro Area (see here the last report);
- Wednesday 5th of January 15.30PM – EIA report about Crude oil inventories: The EIA (Energy Information Administration) will issue its weekly report on the US crude oil & petroleum related products (such as gasoline and propane) inventories and consumption of the passing week. These data show the main changes in demand and supply for crude oil in the U.S. and how these changes might affect crude oil price. Last week’s report showed a decline of 0.5% in crude oil stocks, which is a drop of over 9 million barrels of crude oil. As the winter progress we will probably continue seeing a decline in crude oil stocks. This ongoing decline in crude oil stocks might explain the recent moderate rise in crude oil prices from last week (see read my previous review on crude oil stocks);
- Thursday 6th of January 13.30PM – Department of Labor report about US unemployment claims: The weekly report presents the unadjusted and seasonally adjusted data of last week’s unemployment claims. For the week ending on Dec 25th, the report showed a decrease in initial claims of 34,000, settling on 388,000 claims; and for the week ending on Dec 18th there was a increase of 0.1% compare to the previous week in insured unemployment rate, reaching 3.2%; furthermore, the number of insured unemployment for the week of Dec 18th was 4.071 million, an increase of 57,000 compare to the previous week. This is one of the indicators for the US economy’s condition; if the report this week will continue to show a decrease in unemployment claims it could indicate that the U.S. economy is on its way to recovery. Further, this indicator could also provide a signal for investors to reconsider investing in the US; consequentially, this might increase the value of the US dollar compare to major currencies and thus reduce the appeal of commodities such as Gold and Crude oil as an investment and thus decrease their price;
- Thursday 6th of January 15.30PM – EIA report about Natural gas storage: The EIA will also issue its weekly report on natural gas and the main changes in storage and consumption in the US. Due to the holidays, the EIA didn’t issue a report only the raw figures (see here my previous review on last week’s figures update). The Natural Gas Working Underground Storage showed a decrease of 5.4% compare to the previous week, reaching 3,232 (Billion Cubic Feet) for all lower 48 states. As expected, due to the cold weather, there was a rise in demand of Natural Gas for heating purposes as temperatures in Northeast US fell for the month of December; however, in the last couple of weeks Natural gas prices didn’t rise much probably due to the high storage levels and good supplies;
- Friday 7th of January 10.00AM – about Euro zone unemployment rate: The monthly report shows the seasonally adjusted data of November unemployment rate in Euro zone. For the month of October, the report showed a seasonally adjusted unemployment rate of 10.1%, which is a 0.1 percent points rise compare to September. This means that in the EU27, 23.151 million people, of whom 15.947 million live in the Euro zone, were unemployed during October. This is an increase of 84,000 unemployed people during October, compare to September, and an increase of 0.59 million people compare to October 2009. This is one of the indicators for Europe’s economic condition; the expectations are that the forthcoming report will continue to show no improvement in unemployment rate, which coincide with the unstable condition of EU27 economy. Consequentially, as the unemployment rate rises (or don’t decrease) and the economic condition doesn’t improve, it could have a downward effect on EU27’s demand for major commodities (see here the last repot).
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