Weekly Outlook of Financial Markets for November 4-8

Last week, the FOMC meeting may have rekindled the speculations of tapering QE3 in December. The market reaction soon followed as the USD rallied and precious metals prices tumbled down. Looking forward, will the US dollar continue to rally? This week several events, speeches and reports may affect the financial markets. These include: U.S non-farm payroll report, ECB, RBA and BOE rate decisions, China’s new loans, U.S GDP for the third quarter, Ben Bernanke speaks, GB manufacturing production, Bank of Japan’s Kuroda Speaks, Canada and Australia’s employment reports, China’s trade balance, German factory orders, and U.S. jobless claims.  Here is an economic outlook for the week of November 4th to November 8th regarding the U.S, Australia, Canada, Euro Area, China, Japan, and Great Britain.

(All times GMT):

Monday, November 4th

02:30 – Australian Retail Sales: This monthly report will refer to September 2013. In the latest report, the seasonally adjusted retail sales rose by 0.4% during August; this news may affect the Aussie dollar, which tends to be linked with oil and gold prices;

08:15 – Spanish Manufacturing PMI: This report will pertain to Great Britain’s manufacturing sector in October 2013. In the last update regarding September 2013 the index slipped to 50.7. This rate drop means the manufacturing sector is growing at a slower pace; this index might affect GB Pound;

09:30 – GB Construction PMI:Great Britain’s construction sector in September 2013 slipped as the PMI decreased to 58.9 – the construction sector is growing at a slower pace. The upcoming report will refer to October;

15:00 – U.S Factory Orders: This report will pertain to the developments in U.S. factory orders of manufactured durable goods during September; in the previous report factory orders decreased by 2.4%; this report will offer some insight regarding the changes of the U.S economy;

Tuesday, November 5th

05:30 – Reserve Bank of Australia – Cash Rate Statement: The last time the RBA reduced its cash rate was back in September. The current rate is at 2.50% – its lowest level in years, which contributed to ongoing depreciation of the Aussie dollar. The current expectations are that RBA will keep its cash rate unchanged in this upcoming rate decision;

Tentative – Bank of Japan’s Kuroda Speaks: Bank of Japan Governor will talk at the meeting with Business Leaders, in Osaka. Kuroda’s words could affect the direction of the Japanese yen;

08:15 – Switzerland’s CPI: In the last report, the consumer price index rose by 0.3%; this was the first rise in CPI in months; if the CPI continues to rise, this may eventually affect the Swiss National Bank’s monetary policy;

09:30 – GB Services PMI: In the last report, this index slipped to 60.3; this index may affect the British Pound’s direction;

10:00 – EU Economic Forecast: The European Commission will issue its quarterly outlook report for the EU economy;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will pertain to October 2013. In the latest report, this index decreased, for the first time in three months, to 54.4% – the non-manufacturing sector is growing at a slower rate compared to the previous month; this index may affect the US dollar;

Wednesday, November 6th

02:30 – Australian Trade Balance: The forthcoming report will refer to September. In the last update, for August, the seasonally adjusted balance of goods and services reached an $820 million deficit. The export of non-monetary gold increased by $307 million; if gold exports further rise, it might suggest a rise in demand for non-monetary gold (see here latest update);

09:30 – Great Britain Manufacturing Production: This update will show the annual rate of GB’s manufacturing production as of September; in the previous report regarding August 2013 the index fell by 1.2% (M-2-M); this news may affect the British Pound;

11:00 – German Factory Orders: The next report will refer to October 2013. In the last update, the factory orders slipped by 0.3% during September;

15:30 – U.S Crude Oil Stockpiles Weekly Report: The EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on November 2nd;

Thursday, November 7th

02:30 – Australia Employment Update: In the last report regarding October 2013 the rate of unemployment inched down to 5.6%; the number of employed (seasonally adjusted) slightly increased by 9,100 people. This report could affect the Aussie dollar (see here the recent report);

11:00 – German Industrial Production: The next report will pertain to October 2013. In the last update, the industrial production increased by 1.4% during September;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will publish its basic rate for November 2013; the MPC will also state of any new changes to its asset purchase pogrom; as of October, BOE left its interest rates at 0.5% and the asset purchase plan at £375 billion;

12:45 – ECB Rate Decision: ECB will announce of any changes to its monetary policy and economic outlook as of November. The current expectations are that ECB will leave the interest rate, which is currently set at 0.5%, unchanged. But ECB President Draghi is likely to refer to ECB’s economic outlook. He could change the expectations on the LTRO and interest rate, which could affect mid-term expectations and thus affect the Euro. Finally, if ECB surprises and cuts its cash rate or deposit rate, the Euro is likely to resume its downward trend, which may drag along with it commodities prices;

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 2nd; in the previous report the jobless claims slightly fell by 10k to reach 340k; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

13:30 – First U.S GDP 3Q 2013 Estimate: This will be the first estimate of U.S’s third quarter 2013 real GDP growth. In the latest estimate the U.S GDP rose by 2.5% in the second quarter of 2013 (it was revised up). If the growth rate from second quarter of 2013 to the third quarter further rises, this could positively affect not only the US dollar but also commodities prices;

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 November 2nd;

19:00 – ECB President Speaks: Mario Draghi is expected to participate in a panel discussion at the Economic Forum organized by Die Zeit newspaper, in Hamburg;

Friday, November 8th

01:30 – Reserve Bank of Australia – Monetary Policy Statement: The RBA will publish its quarterly report regarding the Bank’s monetary policy;

13:30 – Canada’s Employment Report: In the latest employment update for September 2013, unemployment remained inched down to 6.9%; the employment rose by 11.9k 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 for September 2013, the labor market slightly expanded: The number of non-farm payroll employment rose by 148k – lower than the number many had anticipated; the U.S unemployment rate edged down to 7.2%; the upcoming employment report could show a drop in jobs or even a contraction, due to the government shutdown. If the employment doesn’t reach 150 thousand (in additional jobs), this may pressure up gold and silver and adversely affect the U.S dollar and U.S stock markets;

13:30 – U.S Personal spending: This monthly report will refer to the changes in income and outlays in the U.S during September; in the last report regarding August the personal income slightly rose by 0.3%;

Tentative – China’s Trade Balance: Based on the recent monthly report, China’s trade balance fell to a $15.2 billion surplus; if the surplus further falls, it could indicate China’s economy isn’t improving and thus may adversely affect commodities;

Tentative – China New Loans: This report refers to the developments in China’s new loans. Based on the previous report, the total loans rose again; this report is another indicator for China’s economic growth;

Tentative – China’s CPI: Last month, China’s inflation rate slightly fell to an annual rate of 3.1%, which is still far off (below) Bank of China’s target inflation. The lower than targeted inflation is another indication for China’s economic slowdown. If the inflation continues to decline, this may indicate China’s economy isn’t improving;

14:55 – UoM Consumer Sentiment (preliminary):University of Michigan will publish its preliminary consumer sentiment monthly update; this survey could offer information regarding the latest developments in U.S consumers’ sentiment; According to the recent report, the sentiment index declined to 75.2;

20:30 – Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give speech in a discussion panel. The title of his speech is “The Crisis as a Classic Financial Panic”. The speech will take place at the International Monetary Fund Conference: Fourteenth Jacques Polak Annual Research Conference, Washington, D.C. If Bernanke refers in his speech to the Fed’s policy, this speech may stir up the financial markets;

05:30 – China’s Industrial Production: Based on the last month’s report, China industrial production fell to an annual rate of 10.2%; if the growth rate further falls, it may suggest China’s economy isn’t progressing any faster;

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