Financial Market Forecast for May 26-30

This week several U.S related news items could stir up the markets again including: GDP for the first quarter of 2014, core durable goods, jobless claims, consumer confidence, and pending home sales. Canada’s current account and GDP by industry are the main reports to come out this week. In Europe, Draghi will give a speech and other economic reports will be published such as French consumer spending, Germany’s consumer climate, employment report, and retail sales. Also, the EU parliamentary elections took place over the weekend and could also impact the financial markets. Finally, in Asia BOJ Kuroda  will give a speech; several reports will be released including China’s manufacturing PMI and Japan’s retail sales. Here is a short overview of these reports and events for the week of May 26th to May 30th.

(All times GMT):

Monday, May 26th

EU Parliamentary Elections: The elections for the European Parliament took place during the long weekend and will elect 751 members;

08:00 – Gfk German Consumer Climate Survey: This survey projects Germany’s consumers’ economic climate (past and future economic conditions – on a monthly basis) for May. In the last report for April 2014, the climate index remained flat at 8.5;

09:00 – Draghi Speaks: ECB President will speak at the European Central Bank Forum on Central Banking, in Portugal;

Tuesday, May 27th

13:30 – U.S Core Durable Goods: This monthly report regarding April may indicate the developments in U.S demand for commodities including oil and gas. As of March 2014, new orders of manufactured durable goods increased to $236.04 billion – a 1.1% rise compared to February; if this report presents additional growth in new orders, then it could pull up not only the USD but also commodities;

15:00 – U.S Consumer Confidence: According to the previous update for April, the consumer confidence index remained unchanged at 82.3 (month-over-month). This report might affect the USD;

01:00 –Governor Kuroda speaks: The Governor of Bank of Japan will give a speech in Tokyo. His words could stir up the Japanese yen; he might refer to the recent monetary policy meeting of BOJ in which the bank left the policy unchanged;

Wednesday, May 28th

07:45 – French Consumer Spending: This report shows the month to month changes in the inflation-adjusted value of all goods expenditures by consumers; according the recent report, consumer spending slightly rose by 0.4%;

08:55 – Germany’s Unemployment Update: In the latest unemployment update for April 2014, unemployment declined by 25k. The next report might affect the Euro and consequently commodities;

09:00 – Euro Area Monetary Development: This monthly report will pertain to the developments of the M3, M1 and loans to private sector in the Euro area as of April 2014. In the latest March report, the annual growth rate for M3 slipped to 1.1%; M1 also declined to 5.6%. Finally, the annual growth rate of loans to private sector remained at -2%. This news suggests the EU inflation isn’t picking up as the growth rate of M1 and M3 fell, and loans continue to contract. The progress of the EU monetary base is likely to affect future ECB rate decisions;

23:50 – Japan’s Retail Sales: This monthly update will refer to April 2014. In the previous update, the volume of retail trade spiked by 11% during March;

02:30 – Australia Private New Capital Expenditure: This quarterly update shows the changes in the private new capital expenditures and expected expenditures for the first quarter of 2014. As of the previous quarter, the seasonal adjusted total of new capital expenditure dropped by 5.2% (Q-o-Q). If capital expenditures continue to fall, this trend may adversely affect the Aussie dollar;

Thursday, May 29th

13:30 – Canada’s Current Account: This report shows the gap between imported and exported goods and services on a quarterly basis; in the previous quarter, the deficit grew to $16 billion;

13:30 – Second U.S GDP 1Q 2014 Estimate: This will be the second estimate of U.S’s first quarter 2014 real GDP growth. In the early estimate, the U.S GDP grew by only 0.1% in the first quarter. Therefore, any higher number could be enough to pull back up the U.S 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 23rd; in the recent report the jobless claims rose by 28k to reach 326k;

15:00 – U.S Pending Home Sales: This report presents the changes in pending home sales in the U.S during April; in the previous update for March, pending home sales index rose by 3.4% (month-over-month). This report is another signal for the movement of the U.S housing market; if the index rises again, it may pull up the U.S dollar;

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 May 23rd;

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 May 23rd;

Friday, May 30th

07:00 – Germany’s Retail Sales: In the latest update for April 2014, retail sales dropped by 0.7%;

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

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for March 2014. In the last update regarding February 2014, the real gross domestic product rose by 0.2%;

02:00 – China Manufacturing PMI: As of April, the Manufacturing PMI inched up to 50.4 – i.e. China’s manufacturing sectors are growing at a faster rate. If in the upcoming report the PMI changes direction and declines, it could signal slowdown in the progress of China’s manufacturing sectors;

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