Financial Market Forecast for July 14-18

The prices of oil and natural gas took a noise dive last week, while precious metals rallied mainly by the end of the week. On this week’s agenda: Yellen testifies, Philly Fed index, U.S PPI, China’s GDP for the second quarter, Draghi testifies, EU industrial production, China’s new loans, U.S retail sales, BOC rate decision, and U.S housing starts.  So let’s break down the economic colander for the week of July 14th to July 18th.   

(All times GMT): 

Monday, July 14th

Tentative – China New Loans: According to the recent monthly report, the total loans reached 871 billion Yuan; this report is another indicator for China’s economic progress;

10:00 –EU Industrial Production: This report will present the monthly shifts in the industrial production as of June; as of May, the production bounced back by 0.8%;

18:00 – Draghi Testifies: ECB President will testify on monetary policy before the Committee on Economic and Monetary Affairs of the European Parliament, in Strasbourg;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia left its interest rate unchanged at 2.50%. The minutes of the previous monetary policy meeting may offer some insight behind its latest rate decision. Since the Bank isn’t likely to change its policy anytime soon, the minutes aren’t likely to impact the Aussie dollar;

Tuesday, July 15th

09:30 – GB CPI: According to the latest report, the CPI inched down to an annual rate of 1.5% during May. The changes in Great Britain’s inflation could affect BOE’s monetary policy;

10:00 – German ZEW economic sentiment: The next report will pertain to the ZEW indicator of economic sentiment for Germany for June. In May, the ZEW indicator for Germany dropped again to 29.8 points; if Germany’s economic sentiment continues to fall, the Euro could plausibly weaken against leading currencies;

10:30 – BOE Governor Carney Speaks: The Governor of Bank of England is expected to testify, along with BOE Deputy Governor Andrew Bailey, regarding the Financial Stability Report at the House of Commons Treasury Committee Hearing, in London;

13:30 –U.S. Retail Sales Report: This monthly update refers to June; in the previous report regarding May, retail sales rose by 0.3% (month-over-month); core retail edged up by 0.1%; this report also shows the changes in U.S’s gasoline retail sales, which could provide some insight regarding the developments in demand for gasoline;

15:00 –FOMC Chair Yellen Testifies: Following the latest FOMC decision to taper again QE3 by $10 billion, FOMC Chair Janet Yellen will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC. If she were to refer to the FOMC’s future plans regarding its policy, this testimony could impact the USD and precious metals prices;

03:00 –China Second Quarter GDP 2014: In the first quarter of 2014, China grew by 7.4% in annual terms – lower than in the previous quarter. If the growth rate falls further, this may adversely affect commodities prices;

03:00 – China’s Industrial Production: According to the recent monthly report, China industrial production inched up to an annual rate of 8.8%; if the growth rate rises, it may suggest China’s economy is progressing at a faster pace;

Wednesday, July 16th

09:30 – Great Britain Claimant Count Change: As of last month, the number of unemployed in GB dropped again by 27.4K; the rate of unemployment slipped to 6.6%; as the British economy keeps picking up, the BOE is likely to turn more hawkish;

13:30 – Canada Manufacturing Sales: In the recent update regarding May 2014, manufacturing sales inched down by 0.1%;

13:30 – U.S. Producer Price Index: This report presents the inflation rate from the producers’ side; it will refer to June 2014. In the latest report regarding May, this index for finished goods slipped by 0.2% compared with April’s level; the core PPI also inched down by 0.1%; this news might impact the USD;

14:00 – U.S. TIC Long Term Purchases: The Treasury International Capital monthly update will show the developments the purchases and sales of US long term treasuries for May 2014. In the previous report regarding April 2014, the net foreign sales of U.S Treasuries longer-term notes reached a deficit of $24.2 billion;

14:15 –U.S Industrial Production: This report will show the monthly changes in the U.S industrial production during June; as of May, the production changed direction and rose by 0.6%;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will announce of any changes to its overnight rate – the rate is set at 1%. The BOC isn’t expected to make any change to its policy;

15:00 – Bank of Canada’s Monetary Policy Report: The Bank of Canada will also publish its quarterly monetary policy report; if the Bank presents any shifts in this press conference; it could affect the Canadian dollar;

15:00 –FOMC Chair Yellen Testifies: Yellen will testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly update on the U.S oil and petroleum stockpiles for the week ending on July 11th;

Thursday, July 17th

10:00 – EU CPI: According to the latest update, the CPI inched down to an annual rate of 0.5% during May. The developments in EU’s inflation could affect ECB’s monetary policy;

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 July 4th; in the recent report the jobless claims declined by 11K to reach 304K;

13:30 – U.S. Housing Starts: The U.S Census Bureau will publish its U.S housing starts monthly update for June 2014; this report was historically correlated withgold price – as housing starts falls, gold tends to rise the following day (even when controlling to the U.S dollar effect); in the past report, housing starts slipped to 1,000K houses;

13:30 – U.S. Building Permits: In the last report, during May, building permits declined to 990K houses. If building permits continues to fall, it may indicate that the U.S housing market is slowing down (the recent U.S building permits update);

15:00 – Philly Fed Manufacturing Index: This monthly survey projects the growth of the US manufacturing sectors. In the last survey regarding June, the growth rate slightly rose from +15.4 in May to +17.8 in June. If the index further rallies, it may positively affect not only U.S Dollar but also U.S equity markets and commodities(the recent Philly Fed review);

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of July 11th;

23:50 – Bank of Japan’s Monetary Policy Meeting Minutes: The minutes of BOJ’s monetary policy meeting could offer some insight behind its recent meeting;

Friday, July 18th

13:30 – Canada Core CPI: This monthly report will show the developments in the CPI and core CPI of Canada for May; in the previous report, the core CPI rose by 0.5%;

14:55 – UoM Consumer Sentiment (preliminary): University of Michigan will release its preliminary consumer sentiment monthly report; this survey could offer information regarding the recent developments in U.S consumers’ sentiment; According to the last report, the sentiment index slipped to 81.2; 

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