Weekly Outlook of Financial Markets for October 21-25

The U.S government is open for business but the big question remains for how long as the deadline on the budget talks and debt ceiling were pushed forward to mid January and early February, respectively. Until then, the reopening of the government includes several reports that weren’t published earlier this month will come out in the upcoming week in addition to the regular reports including: U.S non-farm payroll report, EU monetary developments, German Ifo business climate, U.S new and existing home sales, Japan’s trade balance, Canada’s retail sales, GB GDP for the third quarter, BOC rate decision, MPC rate vote, China, Germany and France’s manufacturing PMI flash reports, and U.S. jobless claims.  Here is an economic outlook for the week of October 21st to October 25th regarding the U.S, Euro Area, GB, Canada, China, Japan, Australia and Great Britain.   

(All times GMT):

Monday, October 21st

23:50 – Japanese Trade balance: Back in August 2013 the Japanese trade balance deficit fell by 13.3% compared to July, and reach 791 billion yen (roughly $8.1 billion) deficit (seasonally adjusted figures). This drop in deficit was due to the rise in exports (by 2.2%) and the only moderate rise in exports (by 0.1%). Japan is among the leading importers of commodities, including crude oil and silver; its trade balance could offer information vis-à-vis Japan’s developments in demand for goods and services;

15:00 – U.S. Existing Home Sales: This report shows the changes in U.S. existing home sales during September 2013; in the previous report regarding August 2013 the number of homes sold increased again to a seasonally adjusted annual rate of 5.48 million houses; if this trend continues, it might positively affect the U.S dollar;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its last week’s report regarding U.S oil and petroleum stockpiles for the week ending on October 11th;

Tuesday, October 22nd

13:30 – Canada Retails Sales (August 2013): This report will pertain to the retails sales in Canada as of August. In the previous report regarding July 2013, retails sales rose by 1%;

13:30 – U.S. Non-Farm Payroll Report: This report will come out this week due to the government shutdown that impeded U.S data publications including this on. In the previous employment report for August 2013, the labor market slightly expanded: The number of non-farm payroll employment increased by 169k – lower than the number many had expected; the U.S unemployment rate edged down to 7.4%; if the employment increase again by over 150 thousand (in additional jobs), this may pull back down gold and silver and positively affect the U.S dollar and U.S stock markets;

15:30 – EIA U.S. Natural Gas Storage: The EIA will publish last week’s report of the U.S. natural gas market regarding of October 11th;

00:30 – Australia’s CPI for Q3 2013: This quarterly report will pertain to the developments in the consumer price index. In the recent report regarding the second quarter of 2013, the CPI remained stable at 0.4% compared to the first quarter and reached a growth rate of 2.4% compared to Q2 2012; this report could affect the Aussie dollar which is linked with commodities rates;

Wednesday, October 23rd

09:30 –MPC Asset Purchase and Rate Votes: In the last MPC meeting, the Bank left the rate unchanged at 0.5% and the asset purchase program at £375 billion; this vote count will show how many MPC members voted on any changes to the asset purchase program or interest rate;

15:00 – Bank of Canada’s Overnight Rate: The Bank of Canada will decline on its overnight rate decision – the rate is currently at 1%. The BOC may leave its policy unchanged and maintain its interest rate at its current level; the economic developments in Canada might prompt BOC to eventually reduce its cash rate;

15:30 – Bank of Canada’s Monetary Policy and Press Conference: The Bank of Canada will come out with its quarterly monetary policy report and will also have a press conference; if the back presents any changes in this press conference, it could affect the Canadian dollar;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its weekly update on the U.S oil and petroleum stockpiles for the week ending on October 18th;

02:45 – China Manufacturing PMI (flash): HSBC will come out with its flash manufacturing PMI survey for October. Last month’s report regarding September 2013 the Manufacturing PMI rose again to 51.2 – i.e. China’s manufacturing sectors is growing at a slightly faster pace. If in the upcoming report the PMI continues to rise, it could signal growth in China’s economy. This may also positively affect commodities rates;

Thursday, October 24th

09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly report regarding September 2013, the Germany’s PMI slipped to 51.3 i.e. the manufacturing conditions are growing but at a slightly slower pace. This report serves signals the changes in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities rates;

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 September 14th; in the previous report the jobless claims decreased by 15k to reach 358k; the next weekly report may affect the U.S dollar and consequently commodities and equities markets;

15:00 – U.S. New Home Sales: This report will refer to September 2013; in the previous report (opens pdf; for August), the sales of new homes rose to an annual rate of 421,000 – a 7% rise (month-over-month); if the number of home sales continue to increase, this may suggest the housing market in the U.S is reheating; this news may affect the US dollar;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly update of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and prices as of October 18th;

17:45 –BOE Governor Carney Speaks: Governor Carney will give a speech at the 125th anniversary of the Financial Times, in London;

Friday, October 25th

09:00 – German Ifo Business Climate Index: This index comprises the changes (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of October. In the previous report regarding September 2013, the business climate index inched up from 107.7 in August to 107.7 in September; if this trend continues, it might positively affect the Euro;

09:00 – Euro Area Monetary Development: This monthly report will refer to the changes of the M3, M1 and loans to private sector in the Euro area as of August 2013. In the latest August report, the annual growth rate for M3 inched up to 2.3%; M1 fell to 6.8%. Finally, the annual growth rate of loans to private sector reached -2%. This news suggests the EU inflation is falling again as loans continue to contract and the growth rate of M1 diminishes. The progress of the EU monetary base is likely to affect the ECB rate decisions in the near future;

09:30 – Flash Great Britain GDP Q3 2013: This report will show the first estimate of the quarterly growth rate of the British economy for the third quarter of 2013; during the second quarter the GB economy expanded by 0.6% (Q-2-Q); if the growth rate further rises, it could affect the monetary policy of Bank of England and also affect GB pound;

13:30 – U.S Core Durable Goods: This monthly update regarding September may indirectly indicate the shifts in U.S. demand for commodities such as oil and gas. As of August 2013, new orders of manufactured durable goods rose to $224.9 billion; if this report presents another gain in new orders, then it could pull up not only the USD but also commodities;

14:55 – UoM Consumer Sentiment (revised):University of Michigan will come out with its revised consumer sentiment monthly report; this survey could provide information regarding the recent shifts in U.S consumers’ sentiment; according to the latest report, the sentiment index decreased to 77.5;

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