Financial Market Forecast for July 28- August 1

This week, several U.S economic reports will be published including non-farm payroll, manufacturing PMI, GDP Q2 first estimate, pending home sales, and jobless claims. The FOMC will convene again for the fifth time this year to decide of any changes to its policy. In Europe, the flash estimate of the CPI and the unemployment report will be the main focus. Germany’s retail sales, unemployment and CPI as well as Spain’s GDP for Q2 will also be released. In Canada, its GDP monthly update will be published. China’s manufacturing PMI monthly updates will come out. So let’s break down the economic outlook for the week of July 28th to August 1st.

(All times GMT):

Monday, July 28th

15:00 – U.S Pending Home Sales: This report presents the changes in pending home sales in the U.S during June; in the previous update for May, pending home sales index increased by 6.1% (month-over-month). This report is another signal for the progress of the U.S housing market; if the index keeps rising, it may positively impact the U.S dollar;

Tuesday, July 29th

15:00 – U.S Consumer Confidence: According to the last update for June, the consumer confidence index rallied to 85.2 (month-over-month). This report may impact the USD;

Wednesday, July 30th

Tentative – Germany’s Preliminary CPI: In the last CPI report for June 2014, the CPI inched up by 0.3%;

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

08:00 – Spain’s flash GDP Q2 2014: In the last estimate Spain’s GDP grew by 0.4% in the first quarter of 2014. If the growth rate from doesn’t pick up, this could adversely affect the Euro;

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 July 2014 that will be published on Friday;

13:30 – First U.S GDP 2Q 2014 Estimate: This will be the first estimate of U.S’s second quarter 2014 real GDP growth. The first estimate tends to have the strongest impact on the financial market. In the previous estimate the U.S GDP fell by 2.9% in the first quarter of 2014. If the US gross domestic product doesn’t pick up, 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 release its weekly update on the U.S oil and petroleum stockpiles for the week ending on July 25th;

19:00 – FOMC Meeting and Press Conference: The FOMC meeting will take place between July 29th and 30th. The FOMC is expected to announce of sixth tapering decision of its QE3 program. This time, however, the FOMC meeting will be accompanied with a press conference. Thus, the meeting is likely to have modest impact on the markets, unless, of course, the FOMC surprises the markets;

Thursday, July 31st

07:00 – Germany’s Retail Sales: In the latest report for June 2014, retail sales fell again by 0.6%;

08:55 – Germany’s Unemployment Update: In the previous unemployment update for June 2014, unemployment rose by 9K. The next report might impact the Euro;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro Area. According to the last estimate for June, the annual CPI rose to 0.5%, which is still well below the ECB’s target inflation of 2%. If the inflation rate doesn’t rise, 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;

10:00 – EU Unemployment Rate: Last month’s update presented that the rate of unemployment edged down again to 11.6%. This means the labor market in the Euro Area is only slowly progressing;

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for May 2014. In the last update regarding April 2014, the real gross domestic product edged up by 0.1%;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the shifts in the initial jobless claims for the week ending on July 25th; in the last report the jobless claims fell by 19K to 284K;

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

02:00 – China Manufacturing PMI: As of June, the Manufacturing PMI inched up to 51 – i.e. China’s manufacturing sectors are growing at a faster rate. If in the upcoming report the PMI keeps picking up, it could signal a rise in the progress of China’s manufacturing sectors;

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate for its July’s PMI index. Last month’s Manufacturing PMI reached 50.7 – i.e. China’s manufacturing sectors are growing. If the updated PMI index rises again, this will imply China’s manufacturing conditions are improving;

04:30 –BOJ Governor Kuroda Speaks: The governor of Bank of Japan will speak at the Research Institute of Japan, in Tokyo;

Friday, August 1st

09:30 – Spain’s Manufacturing PMI: According to the previous update Spain’s manufacturing index rose to 54.6. This rate gain implies the manufacturing sector is expanding at a faster pace;

09:30 – GB Manufacturing PMI: During April, Great Britain’s manufacturing index inched up to 57.5;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report referring to June 2014, the number of non-farm payroll employment grew by 288K; the U.S unemployment rate remained slipped to 6.1%. In the past five reports, the average growth in employment was well above 200K. If the upcoming report shows another strong gain of over 200K, this could further pull up the USD and slightly bring down the prices of gold and silver;

13:30 – U.S. core PCE: The personal consumption expenditures index is another important measure the FOMC follows in assessing the changes in inflation. In the past report, the price index of the PCE rose by 0.2% and the core PCE (excluding food and energy) also inched up by a similar rate. On an annual rate, the core PCE increased by only 1.5% – well below the FOMC’s inflation target.

14:55 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the recent report, the sentiment index rose to 82.5;

15:00 – U.S Manufacturing PMI: This report will refer to July 2014. Back in June, the index inched down to 55.3; this means the manufacturing is expanding at a slightly slower pace; this index may affect stock markets, USD, and crude oil and natural gas markets;

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