Financial Market Forecast for June 2-6

The commodities market cooled down, while U.S equities rally during the previous week. This week, in the U.S several economic reports will be released including non-farm payroll, non-manufacturing and manufacturing PMI, factory orders and jobless claims. In Europe, ECB rate decision, CPI and BOE cash rate decision will set the pace for the week. If ECB President Draghi announces of any changes to policy, this could have a significant impact on the forex market in general and the Euro in particular. In Canada, BOC will announce its rate for June and Canada’s employment report will be released. Here is an economic outlook for the week of June 2nd to June 6th.

(All times GMT):

Monday, June 2nd

Tentative – Germany’s Preliminary CPI: In the previous CPI report for April 2014, the CPI declined by 0.2%;

09:30 – GB Manufacturing PMI: During March, Great Britain’s manufacturing index rose to 57.3. This rate gain suggests the manufacturing sector is expanding at a faster pace; this index might affect GB Pound;

15:00 – U.S Manufacturing PMI: This report will refer to May 2014. In April, the index rose to 54.9; this means the manufacturing is growing at a faster pace; this index may affect stock markets, USD, and crude oil and natural gas markets;

Tuesday, June 3rd

01:30 – Australian Retail Sales: It will refer to April 2014. In the recent report, the seasonally adjusted retail sales rose by 0.1% during March; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate of its May’s PMI index. Last month’s Manufacturing PMI reached 48.1 – i.e. China’s manufacturing sectors are contacting at a slower pace than in the preceding month. If the updated PMI index rises again, this will suggest China’s manufacturing conditions are improving;

05:30 – Reserve Bank of Australia – Cash Rate Statement: The RBA left its cash rate unchanged since September of last year. The current rate is set at 2.5%. RBA isn’t likely to cut its cash rate in the upcoming meeting;

09:30 – GB Construction PMI: According the previous update, the index declined to 60.8; this means the contraction sectors is growing at a slower rate;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro Area. According to the last estimate for April, the annual CPI rose to 0.7%, which is still well below the ECB’s target inflation of 2%. If the inflation rate remains low, 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 showed that the rate of unemployment inched down to 11.8%. If the rate of unemployment remains elevated, it could adversely affect the Euro;

15:00 – U.S Factory Orders: This report will refer to the developments in U.S. factory orders of manufactured durable goods during May; in the latest report factory orders rose by 1.1%; this report will offer some insight regarding the progress of the U.S economy;

Wednesday, June 4th

02:30 – Australian GDP First Quarter of 2014: This quarterly report will refer to the Australia’s GDP growth rate for the first quarter of 2014. In the fourth quarter of 2013, the GDP grew by 0.8% (seasonally adjusted). Australia is among the leading countries in exporting commodities such as oil, LNG, and metal ores to big economies such as China and Japan; if the GDP growth rate will increase, it could positively affect the Australia dollar (see here last report);

09:30 – GB Services PMI: In the last report, this index rose to 58.7; this index may affect the British Pound’s direction;

All Day – G7 Summit: The finance ministers of seven leading economies will converse about a range of global economic issues, including the Russian-Ukraine crisis, in Brussels;

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

13:30 – Canadian Trade Balance: In the last report regarding March, the trade balance moved from $0.3 billion surplus in February to $0.1 billion surplus in March; this report may affect the Canadian dollar, which tends to be correlated with commodities;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will decide on its overnight rate – the rate is at 1%. The BOC may keep its policy unchanged and maintain its interest rate at 1%; the economic developments in Canada might prompt BOC to eventually reduce its cash rate;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to May 2014. In the recent report, this index rose to 55.2% – the non-manufacturing sector is growing at a faster pace compared to the previous month; this index may affect the US dollar;

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 May 30th;

Thursday, June 5th

01:30 – Australian Trade Balance: The upcoming report will pertain to April. In the previous update, for March, the seasonally adjusted balance of goods and services reached a $730 million surplus; the report will also show the developments in the exports of gold; if gold exports rise, it might suggest a rally in demand for non-monetary gold (see here latest update);

11:00 – German Factory Orders: In the previous report, factory orders rose by 2.8% during April;

10:00 – EU Retail Sales: This monthly report will refer to April 2014. In the recent report, the volume of retail trade rose by 0.3% during March;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will release its basic rate for June 2014; the MPC will also state of any shifts to its asset purchase pogrom; as of April, BOE left its interest rates at 0.5% and the asset purchase plan at £375 billion;

12:45 – ECB Rate Decision: ECB will update its monetary policy and economic outlook as of June. The current expectations are that ECB might reduce its deposit rate to negative rate. This rate decision could affect the Euro; an ECB press conference will also be held following the statement of the ECB regarding its monetary policy;

15:00 – Canadian Ivey PMI: In the previous report, the PMI fell to 54.1; this index may affect the progress of the Canadian dollar;

13:30 – U.S. Jobless Claims Weekly Report: This weekly report will refer to the changes in the initial jobless claims for the week ending on May 30th; in the previous report the jobless claims fell by 27k to reach 300k; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

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

Friday, June 6th

13:30 – Canada’s Employment Report: In the recent employment update for April 2014, unemployment remained at 6.9%; the employment fell by 28.9k during last month. The next report might affect the Canadian dollar and consequently commodities rates;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report referring to April 2014, the number of non-farm payroll employment grew by 288k – higher than the number many anticipated; the U.S unemployment rate plummeted to 6.3%. If employment grows again by over 200 thousand (in additional jobs), this may strengthen the U.S dollar and U.S stock markets;

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