WEEKLY MARKET SNAPSHOT 06/11-10/11|Interest rate decisions in Australia and New Zealand, European PMIs and Chinese economic data will be the outstanding events to monitor this coming week

Nov 3 • Is The Trend Still Your Friend • 213 Views • No Comments

Markit Economics will publish a multitude of PMIs for Europe during the coming week, these leading indicators provide a fascinating insight into where purchase managers believe their individual businesses and sectors may be headed, as such the indicators can prove to be predictive as they lead, they don’t lag.

The Australian central bank the RBA, is predicted to announce that they’re leaving the interest rate unchanged at 1.5%, at the culmination of their Tuesday meeting. Likewise the RBNZ is likely to announce that they’ve also left the key interest rate at 1.75% on Thursday. Canada’s Governor Stephen Poloz may cause the Canadian dollar to move when he holds court at two separate locations on Tuesday. The U.K. economy is constantly under the microscope due to the looming divorce from Europe, therefore the data regarding industrial and manufacturing production, construction output and the latest trade balance figures, will be carefully monitored for any early signs of self-inflicted economic weakness.

China releases several key high impact metrics during the week, the most notable of which will be: the amount of new loans issued, the consumer price index (CPI), exports, imports and trade balance data. Although China’s economic performance appears to be less of a factor, regarding global economic issues lately.

Sunday starts the week off with focus on the Bank of Japan’s minutes relating to their latest monetary policy meeting. With the recent general election and yen falling versus the dollar over recent weeks, investors will be scrutinizing the minutes for signs of any change to the ultra-loose monetary policy adopted by the BOJ, described as “Abeonomics”, over recent years. Early Monday morning the BOJ Governor Kuroda makes a speech in Nagoya, in which he may explain and discuss the various monetary policy matters.

Monday morning begins with New Zealand’s dairy auction data, as a major export nation commodities such as milk powder are watched carefully, for any signs of export weakness in the NZ economy. The reserve bank of New Zealand will also reveal its two year inflation outlook for the fourth quarter. As attention turns to the European markets’ open, Germany’s factory orders will be monitored for any improvement, or decline, on the September 7.8% growth figure. Swiss CPI is forecast to remain close to the current 0.7% YoY figure, thereafter several Markit PMIs for: France, Italy, Germany and the wider Eurozone are published. The Eurozone producer price index will also be revealed.

Tuesday witnesses the Australian central bank reveal its interest rate decision, currently at 1.5% there is no expectation for a rise. As attention shifts to Europe, Germany’s industrial production figure is published, at 4.7% YoY, analysts will be looking for growth to be maintained. Germany’s construction and retail PMIs will be published, retail PMIs will also be delivered for: Italy, France and the Eurozone, whilst overall retail figures for the Eurozone will also be revealed. JOLTS (job openings) figures will be revealed for the USA and consumer credit is expected to show a rise. The day’s significant economic events ends with the governor of the Bank of Canada, Stephen Poloz, delivering a speech and holding a press conference at separate locations in the evening.

Wednesday begins with a raft of Chinese data; imports, exports, foreign investment and trade balance figures. Asian news continues with the publication of Japan’s leading and coincident index readings. USA mortgage applications are published, as are Canadian housing starts and building permits. The traditional weekly report on USA energy inventories is provided; with crude oil inventories as the most prominent reading. In the evening New Zealand’s central bank will announce its interest rate decision; currently at 1.75% there is little expectation for a rise. The evening concludes with a raft of Japanese information published; machine orders, balance of trade, current account and bank lending figures being the most prominent.

Thursday witnesses house sales data published from New Zealand, a figure which crashed in September by -26%, a recovery will therefore be sought. The U.K. trade body for property RICS will publish its October house price balance, whilst Australia will publish its: home loans, investment loans and value of loans data. Japanese bankruptcy figures are reported, before attention shifts to Europe with Swiss unemployment, expected to remain at 3%, beginning an extremely busy session for European data. Germany’s export, import, trade balance and current account surplus data will be published. The ECB will publish its economic bulletin, thereafter a significant amount of data will be published relating to the U.K. economy; industrial and manufacturing data, construction output, trade balance and an estimate from the NIESR for Q4 GDP. As focus turns to the North American continent, Canada’s latest house price information is published, as are the usual weekly figures from the USA for jobless and continuous unemployment claims. Late afternoon the Swiss central bank governor Mr. Jordan will speak at Frankfurt.

Friday starts the day with a raft of Chinese data; the issue of new loans is the most prominent release. Australia’s central bank the RBA will publish its monetary policy statement, shortly after Japan’s latest tertiary industry index reading is revealed. There are no prominent calendar events scheduled for release in Europe on Friday. The USA significant calendar events on the day begins with the university of Michigan sentiment reading, the day closes with the traditional Baker Hughes rig count numbers and the latest U.S. monthly budget forecast for October.

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