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Currency and Stock Markets Weekly Outlook

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After an strong week

Mon, Jul 7 2008, 10:19 GMT
by Adam Narczewski

X-Trade Brokers, XTB

Last week ended strongly on Thursday with the ECB interest rate statement and the U.S labor market report. The upcoming week will be much calmer and should not cause heart attacks of investors although certain reports and publications will be followed very thoroughly.

The more important reports will be revealed on Tuesday. Investors will be waiting for the U.S Pending home sales publication. No shocking news are expected since the economy is slowing down. Related to the housing market will be Ben Bernanke’s speech about financial regulation and stability at the Federal Deposit Insurance Corporation’s Forum on Mortgage Lending in Arlington.

On Wednesday, investors will focus on news from Europe. The U.K will publish its Trade Balance while ECB’s President, Jean-Claude Trichet, will present the ECB's 2007 Annual Report at the plenary session of the European Parliament in Strasbourg. At the end of the day, those watching closely the oil market will be expecting the crude oil inventories report from the U.S.

Thursday will certainly be the most hectic day for the markets regarding macroeconomic publications. The British Monetary Policy Council will decide on interest rates in the U.K. No change from the current 5.00% is expected although the MPC might surprise investors. Inflation increased and is becoming a problem for the British economy. Will the MPC follow last week’s ECB decision and hike interest rates? We will know the answer on Thursday. It will be an important day for the U.S markets too. Ben Bernanke will testify, along with Treasury Secretary Henry Paulson, on financial market regulation before the House of Representatives Committee on Financial Services in Washington DC. Such events always bring attention of investors since the future monetary policy of the Fed can be revealed.

On Friday, a couple of reports can move the markets. The Canadian dollar is pretty volatile recently so investors playing on the CAD will await reports from the Canadian economy: Employment Change, Unemployment rate, and the Trade balance. At the endof the day, the U.S will be back in the spotlight with the Trade Balance publication and the preliminary University of Michigan Consumer Sentiment report.

A couple of reports that are being published this week can move the markets. But can they change the downward trend that we are currently experiencing? Probably not, but they can give us hope for a soon change.

Published on  Mon, Jul 7 2008, 10:22 GMT