Weekly Outlook of Financial Market April 28 – May 2 2014

The forex and commodities markets didn’t move in a clear direction last week but this is likely to changes in this fully packed week ahead of us. This week many news items, decisions, speeches, press conference and events could affect the commodities and forex markets. These include: FOMC meeting, BOJ rate decision and economic outlook, U.S GDP for the first quarter of 2014, FOMC Chair Yellen’s speech, U.S non-farm payroll report, China’s manufacturing PMI, Germany’s retail sales, Canada’s GDP, U.S ISM manufacturing PMI, EU flash CPI, GB construction PMI, EU monetary development, U.S pending home sales, Governor Poloz speaks and U.S factory orders.  Here is an economic outlook for the week of April 28th to May 2nd regarding the U.S, Australia, Canada, China, Euro Area, and Great Britain.

(All times GMT):

Monday, April 28th

15:00 – U.S Pending Home Sales: This report presents the developments in pending home sales in the U.S during March; in the previous update for February, pending home sales index fell by 0.8% (month-over-month). This report is another signal for the progress of the U.S housing market; if the index falls again, it may drag down the U.S dollar;

Tuesday, April 29th

08:00 – Gfk German Consumer Climate Survey: This survey estimates Germany’s consumers’ economic climate (past and future economic conditions – on a monthly basis) for April. In the previous report for March 2014, the climate index remained unchanged at 8.5;

08:00 – Spain’s Unemployment Rate: Last quarter’s report showed that the rate of unemployment didn’t change at 26%;

09:00 – Euro Area Monetary Development: This monthly report will refer to the developments of the M3, M1 and loans to private sector in the Euro area as of March 2014. In the latest February report, the annual growth rate for M3 edged up to 1.3%; M1 inched up to 6.2%. Finally, the annual growth rate of loans to private sector remained at -2.2%. This news suggests the EU inflation is starting to pick up as the growth rate of M1 and M3 increased, though loans continue to contract. The progress of the EU monetary base is likely to affect future ECB rate decisions;

09:30 – Flash Great Britain GDP Q3 2013: This report will show the first estimate of the quarterly growth rate of the British economy for the first quarter of 2014; during the fourth quarter the GB economy expanded by 0.7% (Q-2-Q); if the growth rate increases by a higher rate, it could affect the monetary policy of Bank of England and also affect GB pound;

15:00 – U.S Consumer Confidence: According to the recent update for March, the consumer confidence index increased to 82.3 (month-over-month). This report might affect the USD;

20:30 –Governor Poloz speaks: The Governor of Bank of Canada will testify before the House of Commons Standing Committee on Finance, in Ottawa; his words could affect the direction of the Canadian dollar;

Wednesday, April 30th

Tentative – Japan’s rate decision and press conference: In the upcoming Japanese monetary policy meeting, BOJ members will announce of any shifts to the bank’s current asset purchase program. This decision may affect the direction of the Japanese yen;

07:00 – BOJ Economic Outlook: This report is published twice a year and refers to Bank of Japan’s recent update of its economic outlook; the Bank’s outlook could hint the future monetary measures it may implement to kick start Japan’s economy;

07:00 – German Retail Sales: This monthly update will refer to March 2014. In the recent update, the volume of retail trade rose by 1.3% during February;

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

08:00 – Spain’s flash GDP Q1 2014: In the previous estimate Spain’s GDP only grew by 0.3% in the fourth quarter of 2013. If the growth rate from doesn’t pick up, this could adversely affect the Euro;

08:55 – Germany’s Unemployment Update: In the latest unemployment update for March 2014, unemployment dropped by 12k. The next report might affect the Euro and consequently commodities;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro Area. According to the last estimate for March, the annual CPI dropped to 0.5%, which is well below the ECB’s target inflation of 2%. If the inflation rate falls again, this could indicate the EU economy isn’t heating up. These developments could influence the ECB members with respect to ECB’s future cash rate decisions;

13:15 – ADP estimate of U.S. non-farm payroll:ADP will publish its estimate for the next U.S non-farm payroll changes for April 2014 that will be released on Friday;

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for February 2014. In the last update regarding January 2014, the real gross domestic product rose by 0.5%. This report may affect the Canadian dollar, which is strongly linked with commodities prices including oil and gold;

13:30 – First U.S GDP 1Q 2014 Estimate: This will be the first estimate of U.S’s first quarter 2014 real GDP growth. In the recent estimate the U.S GDP rose by 2.6% in the fourth quarter of 2013. If the growth rate from fourth quarter of 2013 to the first quarter falls, this could negatively affect not only the US dollar but also commodities prices;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The Energy Information Administration will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on April 25th;

19:00 – FOMC Meeting: This will be the third FOMC meeting for this year and will take place between April 29th and 30th. The FOMC will decide whether it will cut down again QE3. Since the labor market showed some signs of progress in recent months and the inflation remains stable, the FOMC is likely to cut down again its QE3 program by another $10 billion to $45 billion a month of asset purchase program. This time, however, the FOMC meeting won’t accompany with a press conference so the meeting is likely to have a lesser impact on the financial markets. Nonetheless, if the Fed cuts down again QE3, it is might pressure up the USD and drag down (for a short period) precious metals prices;

Thursday, May 1st

02:00 – China Manufacturing PMI: As of March, the Manufacturing PMI inched up to 50.3 – i.e. China’s manufacturing sectors are growing at a faster pace. If in the upcoming report the PMI changes direction and falls, it could signal slowdown in the progress of China’s manufacturing sectors, which may negatively affect oil and gold prices;

09:30 – GB Manufacturing PMI: During February, Great Britain’s manufacturing index slipped to 55.3. This rate gain suggests the manufacturing sector is expanding at a slower pace; this index might affect GB Pound;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will pertain to the changes in the initial jobless claims for the week ending on April 25th; in the recent report the jobless claims rose by 24k to reach 329k; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

13:30 –FOMC Chair Yellen Speaks: FOMC Chair Janet Yellen will give a speech at the Independent Community Bankers of America 2014 Washington Policy Summit, Washington, D.C.; the title of her speech is Community Bank Supervision; her words carry weight and could stir up the financial markets if she addresses the FOMC’s policy;

15:00 – U.S Manufacturing PMI: This report will refer to April 2014. In March, the index rose to 53.7; this means the manufacturing is growing at a faster pace; this index may affect stock markets, USD, and crude oil and natural gas markets;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and prices as of April 25th;

Friday, May 2nd

09:30 – GB Construction PMI: According the previous update, the index inched down to 62.5; this means the contraction sectors is growing at a slower pace;

10:00 – EU Unemployment Rate: Last month’s update showed that the rate of unemployment inched down to 11.9%. If the rate of unemployment remains high, it could adversely affect the Euro;

13:30 – U.S. Non-Farm Payroll Report: In the previous employment report referring to March 2014, the number of non-farm payroll employment grew by 192k – close to the number many anticipated; the U.S unemployment rate remained at 6.7%. If the employment growth grows by over 200 thousand (in additional jobs), this may curb down gold and silver and positively affect the U.S dollar and U.S stock markets;

15:00 – U.S Factory Orders: This report will refer to the developments in U.S. factory orders of manufactured durable goods during April; in the latest report factory orders rose by 1.6%; this report will offer some insight regarding the progress of the U.S economy; 

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