Weekly Outlook of Financial Markets for October 14-18

Major commodities prices have mostly declined in the past week: Oil (WTI), gold and silver prices have declined in the past week and thus they have resumed their downward trend from the previous month. The many reports and events that will take place next week will be crowded out by the current political debacle in Washington that includes the government shutdown and raising the debt ceiling by October 17th. These two intertwined problems are likely to keep the financial markets’ focus. The government shutdown will impede the publication of government funded reports such natural gas storage update, and CPI. Nonetheless, let’s take a look at several other new items that could also have some moderate effect on the financial markets: EU industrial production, German ZEW economic sentiment, China’s CPI, Philly fed survey, Japan’s trade balance, Canada’s manufacturing sales, GB climate count, minutes of RBA meeting, China’s new loans, Governor Stevens speaks, EU current account, ECOFIN summit, and U.S. jobless claims.  Here is an economic outlook for the week of October 14th to October 18th regarding the U.S, Euro Area, China, GB, Canada, Japan, Australia and Great Britain.

(All times GMT):

Monday, October 14th

10:00 – EU Industrial Production: This next monthly update will refer to September’s figures. In the recent update, the industrial production changed direction and fell by 1.5% during August;

Columbus Day holiday

All Day – Euro-Group Summits: The summit will be held in Brussels as the EU ministers of finance and Euro-Group President will refer to the latest developments in Europe and the potential ramifications of the US political crisis on Europe’s economy;

Tentative – China’s CPI: Last month, China’s inflation rate slightly fell to an annual rate of 2.6%, 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 fall, this may indicate China’s economy isn’t improving;

Tentative – China New Loans: This report will pertain to the recent changes in China’s new loans. Based on the latest report, the total loans changed direction and rallied; this report is another indicator for China’s economic progress;

00:30 – Minutes of Reserve Bank of Australia’s Monetary Policy Meeting: The Reserve Bank of Australia kept its interest rate unchanged at 2.50%; the minutes of the latest monetary policy meeting may offer some insight behind its recent decision; this news may affect the Australian dollar and consequently commodities prices;

Tuesday, October 15th

09:30 – GB CPI (September 2013): In the previous report referring to August 2013, the CPI slipped to an annual rate of 2.7%; if the inflation rate continues to decline, it may eventually affect the decision of BOE regarding its monetary policy;

10:00 – German ZEW economic sentiment: The forthcoming report will refer to the ZEW indicator of economic sentiment for Germany for September. In August, the ZEW indicator for Germany rose to 49.6 points; if Germany’s economic sentiment continues to rise, the Euro will plausibly strengthen against other currencies including the US dollar;

All Day – ECOFIN Summit: The EU ministers of finance will focus on the economic developments in EU;

Wednesday, October 16th

09:30 – Great Britain Claimant Count Change: As of last month, the number of unemployed in GB had declined by 32.6k; the rate of unemployment inched down to 7.7%;

10:00 – Euro Area CPI: Based on the recent report, the annual CPI fell to 1.3%, which is well below ECB’s target inflation; if the inflation continues to drop, it could raise the odds of ECB cutting again its cash rate;

13:30 – Canada Manufacturing Sales (August 2013): This report will refer to the manufacturing sales in Canada as of August. It may affect the USD/CAD currencies pair, which is strongly linked with commodities. In the last report regarding July 2013, manufacturing sales rose by 1.7%;

15:30 – U.S Crude Oil Stockpiles Report: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on October 11th – this report might not come out if the government shutdown continues;  ;

Thursday, October 17th

09:00 – Euro Area Current Account: Last month’s report showed the gap in value between imported and exported goods, services, income flows, and unilateral transfers reached 16.9 billion Euros. This report could also indicate change in the progress of the EU economy;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the shifts in the initial jobless claims for the week ending on October 12th; in the previous report the jobless claims sharply rose by 66k to reach 374k; the next weekly update may affect the U.S dollar and consequently commodities and equities markets;

15:00 – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the recent survey regarding September, the growth rate fell from +9.3 in August to +22.3 in September. If the index continues to sharply rise, it may positively affect not only U.S Dollar but also U.S equity markets and commodities (the recent Philly Fed review);

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will pertain to the recent developments in natural gas production, storage, consumption and prices as of October 11th – this report might not come out if the government shutdown continues;

02:00 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Australian British Chamber of Commerce Business Lunch, in Sydney; in his upcoming speech, the Governor may refer to the progress of the Australian economy and RBA’s monetary policy; this speech may affect the Australian dollar;

03:00 –China Third Quarter GDP 2013: In the second quarter of 2013, China grew by only 7.5% in annual terms; China’s economy grew by 7.7% in the first quarter of 2013. The current expectations are that the second quarter of 2013 grew in annul terms by a slower rate than in the previous quarter; if the growth rate further dwindles, this may adversely affect commodities prices;

03:00 –China’s Industrial Production: According to last month’s report, China industrial production grew to an annual rate of 10.4%; if the growth rate further rises, it may suggest China’s economy is progressing faster;

Friday, October 18th

Tentative – Bank of Japan’s Kuroda Speaks: Bank of Japan Governor will give a speech. Kuroda’s words could influence traders especially considering the recent weakening of Japanese yen in previous weeks;

13:00 – Canada’s core CPI: This report refers to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for September 2013. According to the latest Canadian CPI update for August, the core CPI slightly rose by 0.2%. This report might affect the Canadian dollar, which is tends to be strongly correlated with oil prices;

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