Financial Market Forecast for November 24-28

The recent decision of People Bank of China to cut its deposit rate by 25 bp and one year lending rate by 40 bp is the first step Beijing made towards dealing with the country’s economic slowdown. This news has provided backwind for commodities prices as this could indicate China is willing to change its policy in order to jump start the economy. In the U.S. the minutes of the FOMC remained relatively hawkish and didn’t provide much drama. This week, the U.S. GDP for Q3, core PCE, durable goods, new and pending home sales, consumer confidence and consumer sentiment reports will also be released. In Europe, German business climate, EU monetary developments, flash CPI and unemployment report will be published. Australia Private New Capital Expenditure, OPEC summit, Canada’s GDP, and BOJ’s monetary policy meeting will be on this week’s agenda. So let’s break down the economic outlook for the week of November 24th to November 28th:

(All times GMT):

Monday, November 24th

09:00 – German Ifo Business Climate Index: This index consists of the changes (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of November. In the October report, the business climate index slipped to 103.2 – the current expectations are that the index will edge down to 103;

23:50 – Bank of Japan’s Monetary Policy Meeting Minutes: The minutes of BOJ’s monetary policy meeting could offer input behind its recent meeting;

01:00 & 04:45 –BOJ Governor Kuroda Speaks: The governor of Bank of Japan is due to speak in Nagoya; later he is expected to give another speech at the Paris EUROPLACE International Financial Forum, in Tokyo;

Tuesday, November 25th

10:00 –BOE Gov Carney Speaks: The Governor will speak, along with other MPC members, at the hearing of the Parliament’s Treasury Select Committee, in London;

13:30 – Canada Core Retail Sales: In the last report regarding August 2014, manufacturing sales declined by 0.3%; current estimates are for a 0.4% gain in the upcoming report;

13:30 – Second U.S GDP 3Q 2014 Estimate: This will be the second estimate of U.S’s third quarter 2014 real GDP growth. In the first estimate the GDP rose by 3.5%; this was higher than market estimates of 3.1%. Back in the first quarter the U.S GDP grew by 4.6%. The current estimates are that the GDP won’t change much and inch down to 3.3%. If the US gross domestic product shows higher growth rate, this could positively impact not only the US dollar but also commodities prices;

15:00 – U.S Consumer Confidence: According to the last update for October, the consumer confidence index spiked to 94.5; this suggests consumer spending is growing. The current estimates are for a modest gain so the index picked up to 95.9;

Wednesday, November 26th

09:30 –GB Third Quarter GDP 2014: In the second quarter of 2014, GB grew by 0.8% in annual terms – the same as in the previous quarter; the projections are for a 0.7% gain in the third quarter;

13:30 – U.S Core Durable Goods: This monthly report regarding October will indicate the developments in U.S demand for commodities including oil and gas. As of September 2014, new orders of manufactured durable goods declined to $246.2 billion – a 0.3% gain compared to August; if this report shows growth in new orders, then it could pull up the USD;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly update will refer to the changes in the initial jobless claims for the week ending on November 21st; in the last report the jobless claims rose to 291K;

13:30 – U.S. core PCE: The personal consumption expenditures index is another measure the FOMC follows to assess of inflation. In the last report, the PCE index inched down by 0.2% and the core PCE (excluding food and energy) edged up again by 0.1%. The expectations are for a 0.4% gain in PCE and 0.1% rise in core PCE for the forthcoming report;

14:55 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the recent update, the sentiment index rose again to 86.9;

15:00 – U.S. New Home Sales: This report will refer to October 2014; in the previous report (opens pdf; for September), the sales of new homes rose to an annual rate of 467,000 – a 7.3% drop (month-over-month); if the number of home sales doesn’t pick up, this may suggest the housing market in the U.S isn’t recovering– current estimates are for a contraction to an annual rate of 471K;

15:00 – U.S Pending Home Sales: This report shows the shifts in pending home sales in the U.S during October; in the previous update for September, pending home sales index increased by 0.3% (month-over-month). This report is another signal for the changes of the U.S housing market; if the index keeps rising, it may positively impact the U.S dollar;

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 November 21st;

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 November 21st;

02:30 – Australia Private New Capital Expenditure: This quarterly report presents the changes in the private new capital expenditures and expected expenditures for the third quarter of 2014. As of the recent quarter, the seasonal adjusted total of new capital expenditure rose by 1.1% (Q-o-Q). If capital expenditures falls again, this may adversely affect the Aussie dollar;

Thursday, November 27th

Tentative – Germany’s Preliminary CPI: In the last CPI report for October 2014, the CPI declined by 0.3%. This time the expectations are for the CPI to remain flat;

09:00 – Euro Area Monetary Development: This monthly report will refer to the developments of the M3, M1 and loans to private sector in the Euro area as of October 2014. In the previous September report, the annual growth rate for M3 increased to 2.5%; M1 also rallied to 6.2%. Finally, the annual growth rate of loans to private sector declined to -0.6%. This news suggests the EU inflation is slowly rising as the growth rate of M1 increased, and loans continue to shrink but at a slower pace;  the current estimates are that M3 edged up to 2.6%;

All Day – OPEC Meeting: This is the last meeting for this year for OPEC members, in which the members will decides on any changes to the OPEC’s oil production quota; this meeting could be more interesting considering the latest developments in the oil market;

Friday, November 28th

07:00 – Germany’s Retail Sales: In the latest report for October 2014, retail sales fell by 3.2%; this month’s estimates are for a gain of 1.7%;

10:00 – EU CPI Flash Estimate: This index estimates the yearly consumer price index of the Euro Area. According to the last estimate for October, the annual CPI remained inched up to 0.4%. The core CPI didn’t change at 0.7%. In either case, it’s well below the ECB’s target inflation of 2%. The current estimates are for the inflation to edge down to 0.3% and the core CPI remained flat at 0.7%;

10:00 – EU Unemployment Rate: Last month’s update presented that the rate of unemployment didn’t change at 11.5%. This figure suggests the labor market in the Euro Area isn’t progressing;

13:30 – Canada’s GDP by Industry: This monthly report shows the changes in major industrial sectors for September 2014. In the last update regarding August 2014, the real gross domestic product slipped by 0.1%; the current expectations are for the GDP to rise by 0.4%;

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