Financial Market Forecast for September 1-5

The market volatility in the markets is slowly returning as we are exiting the summer slumber and into September. We kickoff the month with rate decisions by ECB, BOJ, BOE, RBA and BOC, while in the U.S the NF payroll, manufacturing PMI and factory orders reports will be published. In addition, in Europe, German factory orders and EU retail sales will be come out. China’s manufacturing PMI and Australia’s GDP for the second quarter are some of the reports to be released from the other side of the globe and could move the markets. So let’s break down the economic outlook for the week of September 1st to 5th:

(All times GMT):

Monday, September 1st

02:00 – China Manufacturing PMI: As of July, the Manufacturing PMI rallied again to 51.7 – i.e. China’s manufacturing sectors are growing at a slightly higher pace. If in the upcoming report the PMI keeps rising, it could signal an increase in the progress of China’s manufacturing sectors;

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last estimate for its Augusts’ PMI index. Last month’s Manufacturing PMI also reached 51.7 – i.e. China’s manufacturing sectors are growing. If the updated PMI index rallies again, this will imply China’s manufacturing conditions are improving;

09:30 – GB Manufacturing PMI: During May, Great Britain’s manufacturing index dropped to 55.4;

Tuesday, September 2nd

05:30 – Reserve Bank of Australia – Cash Rate Statement: The RBA left its cash rate unchanged since September 2013. The current rate is at 2.5%. But the ongoing strengthening of the Aussie against leading currencies may slowly push the RBA to consider additional expanding measures. Nonetheless, RBA isn’t expected to make any changes in its cash rate in the forthcoming meeting;

09:30 – GB Construction PMI: In the previous monthly update, this index inched down to 62.4;

15:00 – U.S Manufacturing PMI: This report will pertain to August 2014. Back in July, the index bounced back to 57.1; this means the manufacturing is expanding at a faster pace; this index may impact stock markets, USD, and crude oil and natural gas markets;

02:30 – Australian GDP Second Quarter of 2014: This quarterly report will pertain to the Australia’s GDP growth rate for the second quarter of 2014. In the first quarter of 2014, the GDP grew by 1.1% (seasonally adjusted). Currently, the estimates are for a 0.4% gain in the second quarter. Australia is among the leading countries in exporting commodities such as oil, LNG, and metal ores to big economies such as China and Japan; if the GDP growth rate doesn’t pick up, it could bring down the Australia dollar (see here last update);

00:30 –Governor Stevens speaks: Reserve Bank of Australia Governor is due to speak at the Committee for Economic Development of Australia Luncheon, in Adelaide; this speech may affect the Aussie dollar;

Wednesday, September 3rd

09:30 – GB Services PMI: In the last report, this index pulled up to 59.1; this index may affect the British Pound’s direction;

10:00 – EU Retail Sales: This monthly report will refer to July 2014. In the recent report, the volume of retail trade rose by 0.4% during June;

15:00 – Bank of Canada’s Overnight Rate and Press Conference: The Bank of Canada will announce of any shifts to its overnight rate – the rate is set at 1%. BOC isn’t expected to change its policy;

15:00 – U.S Factory Orders: This report presets the developments in U.S. factory orders of manufactured durable goods in August; in the latest report factory orders rose by 1.1%; this report will offer some insight regarding the developments in the U.S economy;

01:30 – Australian Retail Sales: In the recent report referring to June, the seasonally adjusted retail sales rose by 0.6%; this news may affect the Aussie dollar, which tends to be correlated with oil and gold prices;

01:30 – Australian Trade Balance: The upcoming update will pertain to July. In the last update, for June, the seasonally adjusted balance of goods and services reached a $1.68 billion deficit; the report will also show the changes in the exports of gold; if gold exports rise, it might suggest an increase in demand for non-monetary gold (see here latest update);

Thursday, September 4th

06:00 – German Factory Orders: In the last report, factory orders declined by 3.2% during July;

Tentative – Japan’s rate decision and press conference: In the upcoming Japanese monetary policy meeting, BOJ members will announce of any changes to the bank’s current asset purchase program. This decision may affect the path of the Japanese yen;

12:00 – BOE Rate Decision & Asset Purchase Plan: Bank of England will release its basic rate for August 2014; the MPC will also state of any changes to its asset purchase pogrom; BOE governor Carney may hint of any changes in the rate in the coming months; as of last month, BOE’s interest rate remained at 0.5% and the asset purchase plan at £375 billion;

12:45 – ECB Rate Decision: ECB will update its monetary policy for August. Following the previous decision from last month, Mario Draghi may refer to any future plans the ECB could take to jump start the EU economy; the main issue will remain whether Draghi will refer to any QE program or even as much as hint of such a program;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on August 29th; in the last report the jobless claims slipped by 1K to 298K;

13:15 – ADP estimate of U.S. non-farm payroll:ADP will publish its estimate for the next U.S non-farm payroll changes for August 2014 that will be released on Friday;

13:30 – Canadian Trade Balance: In the last report, the trade balance moved from $0.2 deficit in May to $1.9 billion surplus in June; if the trade balance shows a sharp change, it could move the Canadian dollar;

13:30 –American Trade Balance: This monthly update for June will present the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the last American trade balance update regarding May the goods and services deficit narrowed to $41.5 billion;

15:00 – U.S. ISM Non-Manufacturing PMI: This monthly report will pertain to August 2014. In the recent report, this index rose to 58.7% — the non-manufacturing sector is growing at a faster pace compared to the last month;

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 August 29th;

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 August 29th;

Friday, September 5th

06:00 – German Industrial Production: In the last report, industrial production inched up by 0.3%;

13:30 – U.S. Non-Farm Payroll Report: In the last employment report referring to July 2014, the number of non-farm payroll employment grew by 209K; the U.S unemployment rate edged up to 6.2%. In the past six reports, the average growth in employment was well above 200K. If the upcoming report shows another strong gain of over 200K (current estimates are at 222K), this could further pull up the USD and slightly drag down gold and silver;

13:30 – Canada’s Employment Report: In the recent employment update for July 2014, unemployment inched down to 7%; the employment grew by 41.7K during last month;

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