Weekly Outlook of Financial Markets for March 25-29

Major commodities such as crude oil gold and silver moved in an unclear trend during last week. Moreover, in the forex market currencies also shifted in an unclear trend. The forthcoming week the prices volatility of commodities and currencies might ease down unless the EU and Cyprus Parliament will surprise the market as a new development regarding this country’s bailout will unfold. Besides the ongoing saga regarding Cyprus and its debt crisis, next week several reports, speeches, and events may affect the financial markets. These include: U.S new and pending home sales, Canada’s GDP report, U.S core durable goods, Bernanke’s speech, Governor of RBA speaks, Euro-group meetings, Canada’s budget release, GB current account,  EU monetary developments, Canada’s core CPI, German  retail sales, and U.S. jobless claims.  Here is an economic outlook for the week of March 25th to March 29th regarding the U.S, Euro Area, Canada, Australia, and Great Britain.   

(All times GMT):

Sunday, March 24th

All Day – Euro-Group Meetings: In this summit, the EU ministers of finance will try to seek solutions for Cyprus and will decide on the next step vis-à-vis its bailout. Over the weekend the Cyprus parliament passed a bill to levy uninsured deposits above 100k euro between 20% and 25%. This solution is only partial. The current speculations are that if Cyprus won’t receive the bailout from IMF and EU it might eventually leave the European Union;

Monday, March 25th

17:15 – Bernanke’s Speech: Chairman of the Federal Reserve Bernanke will give a speech at the London School of Economics and Political Science, London. The title of his speech is “Monetary Policy and the Global Economy“. Following last week’s FOMC meeting in which the Fed left its policy unchanged, the Chairman of Fed didn’t reveal anything about the future plans of the Fed vis-à-vis its current asset purchase program (QE3);

Tuesday, March 26th

04:45 –Governor Stevens speaks: Reserve Bank of Australia Governor will give a at the Australian Securities and Investments Commission Annual Forum, in Sydney; he might refer to the recent RBA monetary policy meeting, in which the RBA kept its policy unchanged; this speech may affect the direction of the Aussie dollar;

13:30 – U.S Core Durable Goods: This report will refer to the developments in U.S. orders of durable goods in the manufacturing sector for February 2013. This report may indirectly indicate the changes in U.S. demand for commodities such as oil. As of January 2013, new orders of manufactured durable goods decreased to $217.00 billion; if this report will present another drop in new orders then it could drag down not only the USD but also commodities prices;

15:00 – U.S Consumer Confidence: based to the latest monthly report, the consumer confidence index sharply rose in January to 69.6 (M-o-M). The current expectations are that the February index may continue to rise; this report might affect commodities prices including the oil and natural gas rates;

15:00 – U.S. New Home Sales: This report will refer to February 2013; in the latest report (opens pdf; for January), the sales of new homes sharply increased to an annual rate of 437,000 – a 15.6% gain (month over month); if the number of home sales will continue to rally, it may indicate a sign of recovery in the U.S real estate market which may also affect the path of the USD.

Wednesday, March 27th

07:00 – German Consumer Climate: Gfk group will come out with its German consumer climate index. If this report will continue to present growth, it might pull up the Euro;

08:00 – KOF Economic Barometer: this report provides an estimate to the Swiss economy in the months to follow;

09:30 – GB Current Account: This quarterly report will present of any changes in the gap between the impost and exports as of the previous quarter. Based on the recent report, the deficit contracted to 12.8 billion pounds.  This report might affect the strength of the British Pound;

13:00 – Canada’s core CPI: This report will pertain to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for February 2013. Based on the Canadian CPI report for January 2013, the core CPI edged up by 0.1% during the month. This report might affect the Canadian dollar, which is also strongly correlated with commodities rates;

15:00 – U.S. Pending Home Sales: This report presents the changes in pending home sales in the U.S. for February; in the recent update, the pending home sales index bounced back and rose by 4.5% (M-over-M). These data are another indicator for the developments in America’s housing market; if the housing data will show a rise in sales it may pull up the U.S dollar;

15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly report on the U.S oil and petroleum stockpiles for the week ending on March 22nd; in the recent update for March 15th, stockpiles inched down by 0.08% or by 1.5 ml bl to reach 1,775.3 ml bl.

Thursday, March 28th

08:00 – German Retail Sales: This monthly report will present the changes in German retail sales during February. In January 2013, retail sales rose by 3.1% – higher than many had anticipated; if this report will rally again then it might strengthen 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 during February 2013. In the recent January report, the annual growth rate for M3 rose to 3.5%; M1 also increased to 6.7%. Finally, the annual growth rate of loans to private sector declined again to -0.4%. This news suggests the EU economy isn’t progressing; if this trend will continue it may adversely affect the Euro/USD and consequently commodities;

13:30 – Canada’s GDP by Industry: the upcoming update will present the developments in major industrial sectors during January 2013. In the recent update regarding December 2012, the real gross domestic product declined by 0.2%. This report may affect the Canadian dollar, which is strongly linked with major commodities prices;

13:30 – Third U.S GDP 4Q 2012 Estimate: This will be the third and final estimate of U.S’s fourth quarter 2012 real GDP growth. In the recent estimate the U.S GDP edged up by 0.1% in the fourth quarter; in the third quarter the GDP grew by 2.7%; in the 2Q2012 the GDP growth rate reached 1.7% (annual rate). This presents a decline in the growth rate for the US’s GDP. If there will be a sharp change in the growth rate from second to the third Q4 estimate, this could affect not only the US dollar but also commodities prices.

13:30 – U.S. Jobless Claims Weekly Report:  this weekly update will pertain to the developments in the initial jobless claims for the week ending on March 22nd; in the recent report the jobless claims changed course and rose by 2k to reach 334k; this upcoming weekly update may affect the path of U.S dollar and consequently commodities and stocks markets;

15:30 – EIA U.S. Natural Gas Storage Update: the EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and prices as of March 22nd; in the recent weekly report, natural gas storage declined again by 62 Bcf to 1,876 Bcf;

Friday, March 29th

14:55 – UoM Consumer Sentiment (revised):University of Michigan will publish its revised consumer sentiment monthly update; this survey could offer an insight to recent changes in U.S consumers’ sentiment; based on the latest update, the sentiment index rallied to 77.6;

20:00 – Canada’s annual budget release:Canada will come out with its annual budget;

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