Weekly Outlook of Financial Markets for December 30- January 3

The holiday season will continue next week, which means only a few reports will be released during the week. Nonetheless, the forex and commodities markets could demonstrate high volatility due to the low volume of trade. This week several reports will be released and may affect commodities, equities and forex markets; these include: U.S pending home sales, U.S manufacturing PMI, Spain’s employment report, China’s manufacturing PMI, EU monetary development, U.S consumer confidence, GB construction PMI, oil and gas EIA weekly update, and U.S. jobless claims. Here is a breakdown for the week of December 30th to January 3rd referring to the U.S, Euro Area, China, Canada, and Great Britain.

(All times GMT):

Monday, December 30th

15:00 – U.S Pending Home Sales: This report shows the changes in pending home sales in the U.S during November; in the previous report, the pending home sales index fell again by 0.6% (month-over-month). This report is another signal for the progress in the U.S housing market; if the index continues to fall, it may drag down the U.S dollar;

Tuesday, December 31st

15:00 – U.S Consumer Confidence: According to the last monthly update, for November, the consumer confidence index declined to 70.4 (month-over-month). The current expectations are that the December index may rally; this report might affect the USD;

Wednesday, January 1st

02:00 – China Manufacturing PMI: As of November, the Manufacturing PMI remained flat at 51.4 – i.e. China’s manufacturing sectors are expanding. If in the upcoming report the PMI starts to fall, it could signal slowdown in the growth rate in China’s manufacturing sectors, which could also negatively affect oil and gold prices;

Thursday, January 2nd

02:45 – China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last update on its estimate for December’s PMI index. Last month’s Manufacturing PMI reached 50.8 – i.e. China’s manufacturing sectors is expanding at a slightly slower pace than the previous month. If the updated PMI index falls again, this will suggest China’s manufacturing conditions aren’t improving;

08:15 – Spanish Manufacturing PMI: This report will pertain to Spain’s manufacturing sector in December 2013. In the last update regarding November 2013 the index fell to 48.6. This rate drop means the manufacturing sector is contracting;

09:30 – GB Manufacturing PMI: During November, Great Britain’s manufacturing index rose to 58.4. This rate gain means the manufacturing sector is growing at a faster rate; this index might affect GB Pound;

13:30 – U.S. Jobless Claims Weekly update:  This weekly update will pertain to the changes in the initial jobless claims for the week ending on December 28th; in the previous report the jobless claims decreased by 42k to reach 338k; this next weekly report may affect the U.S dollar and consequently commodities and stocks markets;

15:00 – U.S Manufacturing PMI: This report will pertain to December 2013. In November, the index rose again to 57.3% – the highest level in the past couple of years; this means the manufacturing is growing at a faster rate; this index may affect stock markets, USD, and crude oil and natural gas markets;

Friday, January 3rd

08:00 – KOF Economic Barometer: This monthly report estimates the developments in the Swiss economy in the upcoming months;

08:00 – Spain’s Unemployment Update: In the recent unemployment update for November 2013, unemployment fell by 2.5k. The next report might affect the Euro and consequently commodities;

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 November 2013. In the latest October report, the annual growth rate for M3 fell to 1.4%; M1 declined to 6.6%. Finally, the annual growth rate of loans to private sector reached -2.1%. This news suggests the EU inflation is falling again as loans continue to shrink and the growth rate of M1 and M3 declines. The progress of the EU monetary base is likely to affect future ECB rate decisions;

09:30 – GB Construction PMI: Great Britain’s construction sector in November 2013 improved again as the PMI increased to 62.6 – the construction sector is growing at a faster pace. The upcoming report will refer to December;

15:30 – U.S Crude Oil Stockpiles Weekly report: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on December 27th; the report will also show the shifts in imports, refinery input and production, which could provide some insight behind the latest shifts in the price of crude oil in the U.S; 

15:30 – EIA U.S. Natural Gas Storage Update: The EIA weekly report refers to the U.S. natural gas market; the report presents the latest developments in natural gas production, storage, consumption and rates as of December 27th;

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