Financial Market Forecast for March 3-7

The commodities markets slowed down last week; in the forex market the U.S dollar slightly depreciated against the Euro. This week will be packed with many news items, decisions, reports and events that could affect the commodities and forex markets. These include: U.S non-farm payroll report, Spain’s employment report, RBA, BOC, ECB and BOE rate decisions, China’s manufacturing PMI, Australia’s GDP for the fourth quarter, U.S and Canada trade balance reports, U.S ISM manufacturing and non-manufacturing PMI, Canada’s employment report, Draghi’s speech, RBA governor talks, EU and Australia retail sales updates, and U.S factory orders.  Here is an economic forecast for the week of March 3rd to March 7th regarding the U.S, Australia, Canada, China, Euro Area, and Great Britain.

(All times GMT):

Monday, March 3rd

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate of its February’s PMI index. Last month’s Manufacturing PMI reached 49.5 – i.e. China’s manufacturing sectors are contacting. If the updated PMI index drops again, this will suggest China’s manufacturing conditions aren’t improving;

08:15 – Spanish Manufacturing PMI: This report will pertain to Spain’s manufacturing sector in February 2014. In the last update regarding January 2014 the index rose to 52.2. This rate gain means the manufacturing sector is expanding at a faster pace;

09:30 – GB Manufacturing PMI: During January, Great Britain’s manufacturing index declined to 56.7. This rate gain suggests the manufacturing sector is growing at a slower pace; this index might affect GB Pound;

14:00 – Draghi Speaks: ECB President will testify before the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels;

15:00 – U.S Manufacturing PMI: This report will pertain to February 2014. In January, the index tumbled down to 51.3%; this means the manufacturing is growing at a much slower pace; this index may affect stock markets, USD, and crude oil and natural gas markets;

05:30 – Reserve Bank of Australia – Cash Rate Statement: The last time the RBA cut its cash rate was back in September 2013. The current rate is set at 2.50% – its lowest level in years, which contributed to depreciation of the Aussie dollar against currencies such Euro and USD. But given the last cash rate decision it seems that the RBA might not cut again its cash rate in the near future;

Tuesday, March 4th

02:30 – Australian GDP Fourth Quarter 2013: This quarterly report will refer to the Australia’s GDP growth rate for the fourth quarter of 2013. In the third quarter of 2013, the GDP grew by 0.6% (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);

08:00 – Spain’s Unemployment Update: In the latest unemployment update for January 2014, unemployment rose by 113.1k. The next report might affect the Euro and consequently commodities;

09:30 – GB Construction PMI:Great Britain’s construction sector in January 2014 improved as the PMI increased to 64.6 – the construction sector is growing at a faster pace. The upcoming report will refer to February;

Wednesday, March 5th

09:30 – GB Services PMI: In the last report, this index slipped to 58.3; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly report will refer to January 2014. In the recent report, the volume of retail trade fell by 1.6% during December;

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 February 2014 that will be released on Friday;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will decide on its overnight rate decision – the rate is currently set at 1%. The BOC may leave its policy unchanged and maintain its interest rate at its current level;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will refer to February 2014. In the recent report, this index rose to 54% – 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 update on the U.S oil and petroleum stockpiles for the week ending on February 28th;

Thursday, March 6th

02:30 – Australian Retail Sales: This monthly update will refer to January 2014. In the recent report, the seasonally adjusted retail sales rose by 0.5% during December; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

02:30 – Australian Trade Balance: The upcoming report will refer to January. In the previous update, for December, the seasonally adjusted balance of goods and services reached a $470 million surplus; the report will also show the changes 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: This monthly report will refer to February 2014. In the recent report, factory orders fell by 0.5% during January;

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

12:45 – ECB Rate Decision: ECB will state its monetary policy and economic forecast as of March. The current expectations are that ECB will keep its cash rate unchanged, but ECB President Mario Draghi may hint of future plans to cut the cash deposit rate to become negative. This kind of hint might pull down the Euro; there will also be an ECB press conference;

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 February 28th; in the previous report the jobless claims rose by 14k to reach 348k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

15:00 – U.S Factory Orders: This report will refer to the developments in U.S. factory orders of manufactured durable goods during February; in the latest report factory orders decreased by 1.5%; this report will offer some insight regarding the progress of the U.S economy;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and prices as of February 28th;

22:30 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to testify before the House of Representatives Standing Committee on Economics, in Canberra; this speech may affect the Aussie dollar;

Friday, March 7th

11:00 – German Industrial Production: The next report will refer to February 2014. In the previous update, the industrial production changed course and fell by 0.6% during January;

13:30 – Canadian Trade Balance: In the last update regarding December 2014, the trade balance moved from $0.9 billion deficit in November to $1.7 billion deficit in December; this report may affect the Canadian dollar, which tends to be linked with commodities;

13:30 –American Trade Balance: This monthly update for January 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; according to the last American trade balance update regarding December the goods and services deficit widened to $38.7 billion;

13:30 – Canada’s Employment Report: In the last employment update for January 2014, unemployment slipped to 7%; the employment rose by 29.4k during last month. The next report might affect the Canadian dollar and consequently commodities;

13:30 – U.S. Non-Farm Payroll Report: In the previous employment report regarding January  2014, the labor market modestly grew: The number of non-farm payroll employment increased by 113k – much lower than the number many had expected; the U.S unemployment rate inched down to 6.6%. If the employment exceed 150 thousand (in additional jobs), this may pull down gold and silver and positively affect the U.S dollar and U.S stock markets;

Tentative – China’s Trade Balance: According to the recent monthly report, China’s trade balance rose to a $31.9 billion surplus; if the surplus further rises, it could indicate China’s economy is improving and thus may positively affect commodities prices;

02:30 – China’s CPI: Based on the recent report, the CPI remained unchanged at annual rate of 2.5%; if the annual rate falls, it could suggest the Chinese economy is slowing down.

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