Financial Market Forecast for November 17-21

The U.S. dollar changed direction and slipped against most currencies including Euro and Aussie dollar, while precious metals recovered. Energy prices including crude oil and natural gas also a dive during last week. Will the sharp changes and high volatility in the foreign exchange and commodities markets continue this week? This week, several key reports and events could move the markets including: Minutes of FOMC meeting, U.S. CPI, U.S. existing home sales, Japan’s GDP for the third quarter, Canada and GB’s CPI, U.S. industrial production, GB’s retail sales, EU and China’s manufacturing PMI, MPC rate decisions, U.S. housing starts, RBA minutes of last meeting,  and German economic sentiment.  So let’s break down the economic calendar for the week of November 17th to 21st.  

(All times GMT):

Sunday, November 16th

23:50 – Japanese GDP for Q3 – Preliminary estimate: In the second quarter of the year, the Japanese economy contracted by 1.7% and in the first quarter it grew by 1.5%; this time, the report will present the first estimate for the third quarter of the year. The current estimates are that economy expanded by 0.5%, year over year. This report could impact the progress of the Japanese yen and could weigh in on the debate of whether the government will actually raise the tax rate on consumption;

Monday, November 17th

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

14:15 –U.S Industrial Production: This report will present the monthly shifts in the U.S industrial production during October; as of September, the production rose by 1%;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia didn’t change its interest rate at 2.5%; the minutes will provide some additional input regarding the last rate decision;

Tuesday, November 18th

08:25 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Committee for Economic Development of Australia’s Annual Dinner, in Melbourne; this speech may impact the Aussie dollar;

09:30 – GB CPI: According to the previous report, the CPI slipped to an annual rate of 1.2% during September. The current projections are for that it remained flat at 1.2% for October. The changes in Great Britain’s inflation could impact BOE’s monetary policy;

10:00 – German ZEW economic sentiment: The next report will refer to the ZEW indicator of economic sentiment for Germany for October. During September, the ZEW indicator for Germany fell to -3.6 points; if Germany’s economic sentiment bounced back, the Euro could plausibly rally against leading currencies;

13:30 – U.S. Producer Price Index: This report shows the inflation rate from the producers’ side; it will refer to October 2014. In the last report regarding September, this index for finished goods inched down by 0.1% compared with August level; the core PPI remained flat; this news may impact the USD;

Tentative – Japan’s rate decision and press conference: In the upcoming Japanese monetary policy meeting, BOJ members will announce of any shifts to the bank’s current asset purchase program. Considering the BOJ made waves with its recent decision, it’s likely to keep the policy unchanged in the upcoming meeting;

Wednesday, November 19th

09:30 –MPC Asset Purchase and Rate Votes: In the recent MPC meeting, the Bank kept its cash rate at 0.5% and the asset purchase program at £375 billion. In the last two votes, there were two dissenters to raise rates. Nonetheless, the current expectations are still for a rate hike to occur only in the second half of 2015;

13:30 – U.S. Housing Starts: The U.S Census Bureau will publish its U.S housing starts monthly update for October 2014; in the last report, housing starts rose to 1,020K houses;

13:30 – U.S. Building Permits: In the last report, during September, building permits rose to 1,020K houses. If building permits keep rising, it may indicate that the U.S housing market is slowing recovering (the recent U.S building permits update);

15:30 – U.S Crude Oil Stockpiles Weekly report: The EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on November 14th;

19:00 – Minutes of FOMC Meeting: This is likely to be the main event of the week. In the previous meeting back in October, the FOMC decided to its asset purchase program. Since last time there wasn’t a press conference the impact of the minutes on the markets could be stronger than the last minutes release (in which the meeting had a press conference). Last meeting, the FOMC didn’t move the term “considerable time” but it didn’t small changes to the wording mainly regarding the progress in the labor market. The upcoming minutes might provide some insight into the deliberations among FOMC members;

23:50 – Japanese Trade balance: Back in August 2014 the Japanese trade balance deficit widened to 1,070 billion yen (roughly $9.55 billion) deficit (seasonally adjusted figures). Japan is among the leading importers of commodities, including crude oil and gold; its trade balance could offer information vis-à-vis Japan’s developments in its demand for goods and services;

02:45 – China Manufacturing PMI (flash): HSBC will publish its flash manufacturing PMI survey for November. Last month’s report regarding October 2014, the Manufacturing PMI inched down to 50.4 – i.e. China’s manufacturing sectors is expanding at a slightly slower pace. The current expectations are for a modest drop in this index to 50.2. If the PMI index falls, it means China’s manufacturing sector is growing slower;

Thursday, November 20th

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly update regarding October 2014, France’s PMI fell to 47.3 i.e. the manufacturing conditions are contracting slower. Germany’s PMI rose to 51.8 – the industry is grows at a faster pace. For this month, the estimates are for the German PMI to slip to 51.5. These estimates show the developments in the Euro Area’s manufacturing conditions; this news, in turn, may impact the Euro/USD currency pair and consequently commodities rates;

09:30 – Great Britain Retail Sales: According to last month’s report, retail sales in Great Britain declined by 0.3%;

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 November 14th; in the previous report the jobless claims rose to 290K;

13:30 – U.S Core Consumer Price Index: This monthly report refer to the main changes in the core consumer price index for October 2014. According to the U.S Bureau of Labor statistics, during September, the CPI inched up by 0.1%; the core CPI rose by 0.1%; this report could impact the USD and change the FOMC’s monetary policy;

15:00 – Philly Fed Manufacturing Index: This monthly survey estimated the growth of the US manufacturing sectors. In the last survey regarding October, the growth rate slipped from +22.5 in September to +20.7 in October. If the index declines again, it may adversely impact not only U.S Dollar but also U.S equity markets and commodities (the recent Philly Fed review);

15:00 – U.S. Existing Home Sales: This report will show the changes in U.S. existing home sales for October 2014; in the recent report regarding September, the number of homes sold rose to a seasonally adjusted annual rate of 5.17 million houses; the current expectations are for the annul rate to slip to 5.16 million houses;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent developments in natural gas production, storage, consumption and rates as of November 14th;

Friday, November 21st

08:00 – ECB President Draghi Speaks: ECB President will speak at the 24th European Banking Congress “Reshaping Europe,” in Frankfurt;

09:30 – Great Britain Public Sector Net Borrowing: Based on the last month’s report, public net borrowing reached a surplus of $11.1 billion; this measures the gap between spending and income for public corporations, the central government and local governments;

13:30 – Canada Core CPI: This monthly report will show the changes in the CPI and core CPI of Canada for September; in the last report, the core CPI rose by 0.2%;

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