The commodity markets are heating up this summer, while the forex market is cooling down. During last week, gold, silver, natural gas and oil bounced back and rallied. Will these commodities’ rally persist this week? This forthcoming week several reports and events may affect the financial markets. These include: Minutes of the FOMC meeting, U.S new and existing home sales, minutes of Reserve Bank of Australia policy meeting, Canada’s retail sales, China, France and Germany’s manufacturing PMI, GB GDP for the second quarter of 2013, Japan’s trade balance, Jackson Hole conference, and U.S. jobless claims. Here is an economic outlook for the week of August 19th to August 23rd referring to the recent developments in the U.S, Euro Area, Canada, Japan, China, Australia, and Great Britain.
(All times GMT):
Monday, August 19th
23:50 – Japanese Trade balance: In June 2013 the Japanese trade balance deficit tumbled down by 23% compared to May, and reach 598 billion yen (roughly $6.04 billion) deficit (seasonally adjusted figures). This is drop in deficit was due to the decline in imports (by 1.7%) and the rise in exports (by 1.1%). Japan is among the leading importers countries of commodities, including oil and gold; its trade balance could offer information regarding Japan’s developments in demand for goods and services;
00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia lowered its interest rate by 0.25pp to 2.50%; the minutes of the recent monetary policy meeting may offer some additional information behind its latest decision; this news may affect the Australian dollar and consequently commodities prices;
Tuesday, August 20th
13:00 – German PPI: This report will refer to the monthly change in PPI for July 2013. Based on the recent report for June, the PPI remained unchanged. This report might affect the direction of the Euro, which is also correlated with commodities prices;
Wednesday, August 21st
09:30 – Great Britain Net borrowing: this report will refer to the monthly changes in the public sector net borrowing for July 2013; as of June 2013, the net borrowing reached £10.2 billion;
15:00 – U.S. Existing Home Sales: This report shows the developments in U.S. existing home sales during July 2013; in the recent report regarding June 2013 the number of homes sold slipped to a seasonally adjusted annual rate of 5.08 million houses; if this trend will persist, it might affect the U.S 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 August 17th;
19:00 – Minutes of the last FOMC Meeting: Following the recent FOMC meeting, in which the Fed kept its monetary policy unchanged, the prices of gold and silver rallied. The big question will remain whether the Fed will start tapering QE3 in the near future. The upcoming minutes might offer some insight behind the next move of the Fed and whether it will announce of tapering its asset purchase program in the September meeting. Considering the slowdown in growth of the job market, the low inflation, and the moderate sign of growth in other facets of the economy the Fed may decide to keep QE3 unchanged this year. In such a case, the recent rally of gold and silver prices may keep recovering;
Thursday, August 22nd
02:45 – China flash Manufacturing PMI: this index is based on a survey covering 800 companies in 20 industries in China; in the latest HSBC Manufacturing PMI survey referring to July 2013 the Manufacturing PMI fell again to 47.7; this index indicates China’s manufacturing sectors are contracting at a slightly faster rate than in June; if the index will keep contracting, this may adversely affect commodities and risk related currencies such as Aussie dollar;
09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly report regarding July 2013, the German PMI rose to 50.3 i.e. the manufacturing conditions are expanding after they had contracted a month earlier. This report serves as an indicator to the economic development of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities;
13:30 – Canada Retails Sales (June 2013): This report will pertain to the retails sales in Canada as of June. In the latest report regarding May 2013, retails sales rose by 1.2%;
13:30 – U.S. Jobless Claims Weekly Report: this weekly update will pertain to the changes in the initial jobless claims for the week ending on August 17th; in the latest report the jobless claims fell by 15k to reach 335k; the next weekly report may affect the U.S dollar and consequently commodities prices;
15:30 – EIA U.S. Natural Gas Storage: the EIA weekly report of the U.S. natural gas market will pertain to the latest changes in natural gas production, storage, consumption and prices as of August 17th; in latest weekly update, natural gas storage rose again by 65 Bcf to 3,006 Bcf;
All Day – Jackson Hole Symposium: This will be a three day Symposium conducted by the Federal Reserve of Kansas City to be held in Jackson Hole Wyoming. The Symposium will be pertaining to the U.S monetary policy;
Friday, August 23rd
09:30 – Second estimate of GB GDP Q2 2013: This report will show the revised estimate of the quarterly growth rate of the British economy for the second quarter of 2013; during the first quarter the GB economy expanded by 0.3% (Q-2-Q); in the first estimate, Q2 GDP expanded by 0.6%; if the growth rate will remain at the first estimate’s level or higher, it could positively affect GB pound;
13:00 – Canada’s core CPI: This report refers to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for July 2013. Based on the latest Canadian CPI report for June, the core CPI edged down by 0.2%. This report might affect the Canadian dollar, which is also strongly linked with crude oil prices;
15:00 – U.S. New Home Sales: This report will refer to July 2013; in the latest report (opens pdf; for June), the sales of new homes slightly rose to an annual rate of 497,000 – a 8.3% gain (month- over-month); if the number of home sales will keep rising, it may suggest the housing market in the U.S continues to improving; this news may also affect the US dollar;
For further reading:
- Gold and Silver Outlook for August 2013
- Is Gold Making a Comeback?
- Do Gold and Silver protect you from Inflation?
- Is the Golden Era of Gold Over?
- Gold and Silver Yearly Outlook For 2013