Financial Market Forecast for June 23-27

Last week’s FOMC meeting concluded with more dovish tone than many had expected. This news may have contributed to the recovery of precious metals and slightly rally of the USD. This week, several key reports will be released that could impact the financial markets including: U.S PCE, personal spending, home sales, final GDP estimate for the first quarter of 2014, core durable goods, jobless claims, consumer confidence, and consumer sentiment. Great Britain’s current account and GDP final estimate along with BOE’s Carney’s press conferences will be the main events. In the Euro Area, several economic reports will be published such as EU manufacturing PMI, and Germany’s business climate. Also, the EU economic summit will take place. Finally, in Asia, BOJ Kuroda will give a speech; China’s manufacturing PMI will be released. Here is a short outlook of these reports and events for the week of June 23rd to June 27th.

(All times GMT):

Monday, June 23rd

02:45 – China Manufacturing PMI (flash): HSBC will publish its flash manufacturing PMI survey for June. Last month’s report regarding May 2014, the Manufacturing PMI increased again to 49.7 – i.e. China’s manufacturing sectors is scaling down but at a slower pace. If in the upcoming report the PMI index picks up again, it means China’s manufacturing sector is improving;

07:00 –BOJ Governor Kuroda Speaks: The governor of Bank of Japan will give a speech at the 2014 Japan Association of Corporate Executive Members’ Meeting, in Tokyo;

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly update regarding May 2014, France’s PMI fell to 49.3 i.e. the manufacturing conditions are contracting. Germany’s PMI slipped to 52.9 – the industry still grows but a slower rate. These estimates show the developments in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

15:00 – U.S. Existing Home Sales: This report will show the changes in U.S. existing home sales for May 2014; in the recent report regarding April, the number of homes sold edged up to a seasonally adjusted annual rate of 4.65 million houses; if this trend persists, it might positively affect the U.S dollar;

Tuesday, June 24th

09:00 – German Ifo Business Climate Index: This index comprises of the shifts (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of June. In the last report regarding May 2014, the business climate index slipped to 110.4;

09:30 –BOE Governor Carney Speaks: The Governor of Bank of England will speak, among other MPC members, at the Treasury Committee Hearing, in London;

15:00 – U.S Consumer Confidence: According to the last update for May, the consumer confidence index slightly rose to 83 (month-over-month). This report might impact the USD;

15:00 – U.S. New Home Sales: This report will refer to May 2014; in the last report (opens pdf; for April), the sales of new homes rose to an annual rate of 433,000 – a 12.7% gain (month-over-month); if the number of home sales keep recovering, this may suggest the housing market in the U.S is heating down; this news may also impact theUS dollar;

Wednesday, June 25th

13:30 – U.S Core Durable Goods: This monthly report regarding May will indicate the developments in U.S demand for commodities including oil and gas. As of April 2014, new orders of manufactured durable goods increased to $239.9 billion – a 0.6% rise compared to March; if this report shows additional growth in new orders, then it could rally not only the USD but also commodities;

13:30 – Final U.S GDP 1Q 2014 Estimate: This will be the last estimate of U.S’s first quarter 2014 real GDP growth. In the last estimate the U.S GDP contacted by 1% in the first quarter (annual pace). If the growth rate were to be revised down again, this might adversely affect not only the US dollar but also commodities prices;

15:30 – U.S Crude Oil Stockpiles: The Energy Information Administration will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on June 20th;

Thursday, June 26th

10:30 –BOE Governor Carney Speaks: The Governor of Bank of England will hold a press conference about the Financial Stability Report, in London;

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 June 20th; in the previous report the jobless claims fell by 6k to reach 312k;

13:30 – U.S. core PCE: Following the recent remarks made by Chair of the FOMC Yellen regarding the importance of the personal consumption expenditures over the CPI in assessing the changes in the inflation, investors are likely to pay closer attention to the PCE. In the past report, the price index of the PCE rose by 0.3% and the core PCE (excluding food and energy) by the same rate. On an annual rate, the core PCE increased by only 1.4% – less than the inflation target.

13:30 – U.S. Personal Spending: Based on the previous update, spending slipped by 0.1%;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent shifts in natural gas production, storage, consumption and prices as of June 20th;

Friday, June 27th

All Day – EU Economic Summit: The EU ministers of finance will meet and talk about the recent economic developments in EU;

Tentative – Germany’s Preliminary CPI: In the last CPI report for May 2014, the CPI inched down by 0.1%;

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

09:30 – GB Current Account: This quarterly report will show any changes in the gap between the impost and exports as of the recent quarter. According to the previous update, the deficit expanded to 22.4 billion pounds.  This report might affect the British Pound;

14:55 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the developments in U.S consumers’ sentiment; according to the recent report, the sentiment index rose to 81.9;

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