Financial Market Outlook for July 11-15

The Brexit may have subsided a bit in the past week and the recent NFP report helped drive up equities, but the conversation is likely to change back to Brexit as the BOE convenes this week to decide any changes to its monetary policy. Besides the BOE rate decision other reports and events that could move markets include: U.S. CPI and PPI, U.S. retail sales, Australia’s employment report, China’s GDP for Q2, Canada’s manufacturing sales, U.S. industrial production, and China’s industrial production.  

(All times GMT):

Monday, July 11th

All Day – Euro-group Meetings: The meetings are likely to focus on the ramifications of the Brexit vote on Europe;

Tuesday, July 12th

Tentative – Inflation Report Hearings: This will serve the markets as a preview for the upcoming BOE rate decision later this week;

15:00 – U.S. JOLTS Job Openings: The Bureau of Labor Statistics will release its monthly report on the U.S number of job openings for May, excluding the farming industry; in the past update for April, the number of jobs opening rose to 5.79 million; in the upcoming report, the number is expected to reach 5.74 million;

Tentative – China’s Trade Balance: China’s trade balance surplus has expanded last month and is expected to moderately contract in the upcoming report; this update provides another indication for the economic activity in the world’s second largest economy;

Wednesday, July 13th

15:00 – Bank of Canada’s Overnight Rate: Bank of Canada maintained its overnight rate at 0.50%. And the market still expects no change to policy this time; the BOC will also hold a press conference and release its quarterly monetary policy report;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum stockpiles for the week ending on July 8th;

Thursday, July 14th

02:30 – Australia Employment Update: In the recent May report the rate of unemployment remained flat at 5.7%; the number of employed (seasonally adjusted) rose by 17.9K people (see here the recent report);

13:00 – BOE Rate Decision & Asset Purchase Plan: After the Bank of England didn’t change its policy for years, this meeting will be highly anticipated. Currently, the market expects a 25 basis points rate cut so the cash rate will decline to 0.25%; but Mark Carney could also surprise and announce of additional QE program – so far the purchase program hasn’t changed and remained at 375B pounds – and the market doesn’t expect a gain on this front. Any change in these expectations could sharply move the pound. But the main issue will be the wording of the statement and the message this meeting will convey to the markets about what the BOE plans to do next;

13:30 – U.S. Producer Price Index: This report presents the inflation rate from the producers’ side; it will refer to June 2016. In the latest month’s report regarding May, this index for finished goods rose by 0.4%, m-o-m; the core PPI also increased by 0.3%; this will serve as a preview for the CPI report that will be released later on Friday;

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 July 8th; in the recent report, jobless claims fell to 254K; the expectations are for this number to slightly rise to 263K;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the latest changes in natural gas production, storage, consumption and rates as of July 8th;

Friday, July 15th

03:00 –China Second Quarter GDP 2016: Back in Q1, China’s economy grew by 6.7% in annual terms – close to expectations (no surprise there) as the economic data published in China isn’t too reliable. Current expectations place the growth rate at an annual rate of 6.6% for Q2 – which is in line with China’s growth rate goals of 6.5-7%. Any lower figure could prompt more selloffs of Chinese equities;

05:30 – China’s Industrial Production: According to the latest monthly report, China industrial production remained unchanged at an annual rate of 6% — lower than market expectations; if the report shows another slowdown this could further feed the bearish market sentiment;

13:00 – BOE Governor Carney talks: He is expected to speak about climate change and the financial markets, in Toronto;

13:30 – U.S. Retail Sales Report: This monthly report refer to June; in the last May update, retail sales rose by 0.5% (month-over-month); core retail, by 0.4%; in the upcoming report, the expectations are for a gain of 0.1% and 0.4% for retail sales and core sales, respectively;

13:30 – Canada Manufacturing Sales: In the last report regarding May 2016, manufacturing sales rose by 1%;

13:30 – U.S Core Consumer Price Index: This monthly report refers to the changes in the core consumer price index for June 2016. According to the U.S Bureau of Labor statistics, back in May, the CPI rose by 0.2%; the core CPI  also pickup up by 0.2%; this time, the CPI and core CPI are expected to rise by 0.2%;

14:15 – U.S. Industrial Production: This report will show the changes in the U.S industrial production during June; as of May, industrial production decreased by 0.4%;

15:00 – UoM Consumer Sentiment (preliminary): University of Michigan will release its preliminary consumer sentiment monthly report; this survey could offer information vis-à-vis the recent developments in U.S consumers’ sentiment; According to the latest report, the sentiment index fell to 94.3; for the next report, the index is expected to slightly fall to 93.7;

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