Financial Market Forecast for June 30- July 4

The energy commodities markets cooled down during last week as oil and natural gas prices changed course and fell. Precious metals remained virtually unchanged. This week, in the U.S several economic reports will be published including non-farm payroll, manufacturing and non-manufacturing PMI, factory orders, pending home sales, trade balance, factory orders, and jobless claims. Chair of the FOMC Yellen will give a speech. In Europe, the ECB rate decision will be the main focus. Germany’s retail sales and factory orders will be released. EU monetary development, CPI and rate of unemployment will also be published. RBA will decide its rate for July. China’s manufacturing PMI report will come out. In Canada, its trade balance and GDP monthly updates will be released. So let’s break down the economic outlook for the week of June 30th to July 4th.

(All times GMT):

Monday, June 30th

07:00 – Germany’s Retail Sales: In the latest report for May 2014, retail sales fell again by 0.9%;

09:00 – Euro Area Monetary Development: This monthly update will refer to the changes of the M3, M1 and loans to private sector in the Euro area as of May 2014. In the previous April report, the annual growth rate for M3 fell to 0.8%; M1 also slid to 5.2%. Finally, the annual growth rate of loans to private sector fell to -1.8%. This news suggests the EU inflation isn’t heating up as the growth rate of M1 and M3 dropped, and loans continue to shrink. The progress of the EU monetary base is likely to impact future ECB rate decisions;

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

15:00 – U.S Pending Home Sales: This report shows the changes in pending home sales in the U.S during May; in the previous update for April, pending home sales index rose by 0.4% (month-over-month). This report is another signal for the developments of the U.S housing market; if the index picks up, it may positively impact the U.S dollar;

02:00 – China Manufacturing PMI: As of May, the Manufacturing PMI inched up to 50.8 – i.e. China’s manufacturing sectors are growing at a faster pace. 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 of its June’s PMI index. Last month’s Manufacturing PMI reached 49.4 – i.e. China’s manufacturing sectors are contacting at a slower rate than in the previous month. If the updated PMI index rises again, this will imply China’s manufacturing conditions are improving;

Tuesday, July 1st

05:30 – Reserve Bank of Australia – Cash Rate Statement: The RBA kept its cash rate unchanged since September 2013. The current rate is at 2.5%. RBA isn’t likely to cut its cash rate in the upcoming meeting;

08:55 – Germany’s Unemployment Update: In the previous unemployment update for May 2014, unemployment rose by 25k. The next report might impact the Euro and consequently commodities;

09:30 – GB Manufacturing PMI: During March, Great Britain’s manufacturing index inched down to 57. This rate gain implies the manufacturing sector is expanding at a slightly slower pace; this index might affect GB Pound;

10:00 – EU Unemployment Rate: Last month’s update showed that the rate of unemployment edged down again to 11.7%. This means the labor market in the Euro Area has yet to recover;

10:00 – EU CPI Flash Estimate: This index estimates the annual consumer price index of the Euro Area. According to the recent estimate for May, the annual CPI slipped to 0.5%; the core CPI fell 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 progressing. These changes could influence the ECB members with respect to ECB’s future cash rate decisions;

15:00 – U.S Manufacturing PMI: This report will pertain to June 2014. Back in May, the index rose to 55.4; this means the manufacturing is expanding at a faster rate; this index may affect stock markets, USD, and crude oil and natural gas markets;

Wednesday, July 2nd

01:30 – Australian Trade Balance: The upcoming report will refer to May. In the previous update, for April, the seasonally adjusted balance of goods and services reached a $120 million deficit; the report will also show the changes in the exports of gold; if gold exports rise, it might suggest an increase in demand for non-monetary gold (see here latest update);

09:30 – GB Construction PMI: According the previous update, the index declined again to 60; this means the contraction sectors is growing at a slower pace;

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 June 2014 that will be published on Thursday;

15:00 – U.S Factory Orders: This report will refer to the developments in U.S. factory orders of manufactured durable goods during June; in the latest report factory orders rose by 0.7%; this report will offer some insight regarding the developments in the U.S economy;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The Energy Information Administration will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on June 27th;

16:00 –FOMC Chair Yellen Speaks: FOMC Chair Janet Yellen will speak at the International Monetary Fund, in Washington DC; her remarks could impact the financial markets if she were to refer to the future plans of the FOMC and the economic progress of the U.S economy. But based on her last press conference following the conclusion of the FOMC meeting, I’m a bit dubious she will offer any actual information or hints about these issues;

05:00 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Australian Conference of Economists and the Econometric Society of Australasian Meeting, in Hobart; this speech may affect the Aussie dollar;

Thursday, July 3rd

01:30 – Australian Retail Sales: In the recent report referring to April, the seasonally adjusted retail sales rose by 0.2%; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

09:30 – GB Services PMI: In the last report, this index inched down to 58.6; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly report will refer to May 2014. In the recent report, the volume of retail trade rose by 0.4% during April;

12:45 – ECB Rate Decision: ECB will update its monetary policy for July. Following the previous decision from last month to reduce the deposit rate, Mario Draghi may refer to any future steps the ECB could take to jump start the EU economy;

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 June 27th; in the previous report the jobless claims remained at 312K; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

13:30 – Canadian Trade Balance: In the last report regarding April, the trade balance moved from $0.1 billion surplus in March to $0.6 billion deficit in April; if the trade balance show a sharp shift, it could impact the Canadian dollar;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report referring to May 2014, the number of non-farm payroll employment expanded by 217K; the U.S unemployment rate remained unchanged at 6.3%. In the four reports, the average growth in employment was over 200K. If the upcoming report shows another strong month of over 200K, this could keep slowly pulling up the USD and slightly cutting down the prices of gold and silver;

13:30 –American Trade Balance: This monthly update for April will show the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the latest American trade balance update regarding March the goods and services deficit widened to $47.2 billion;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to June 2014. In the recent report, this index rose to 56.3% — the non-manufacturing sector is growing at a faster rate compared to the last month;

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 June 27th;

Friday, July 4th

11:00 – German Factory Orders: In the previous report, factory orders rose by 3.1% during May; 

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