Weekly outlook
This week on the Markets
In approach to the new trade week, here are the main economic events that will move the markets around the globe
1. Australian Producer Price Index, Mon, 23rd Jul, 01:30 am. Prices paid by Australian Producers unexpectedly fell last quarter for the first time in more than two years and raising bets that the central bank will cut interest rates. The producer Price Index dropped 0.3% in the January to March period from the prior quarter when in gained 0.3% according to the data from Bureau of Statistics in Sydney. The median forecast for second quarter is 1.0%, which is 0.4% drop
2. European Consumer Confidence, Mon, 23rd Jul, 02:00 pm. European Consumer Confidence has slumped to the lowest in more than 2 ½ years in June and German unemployment increased more than economist forecast adding to signs that European economy fell into recession. An index of household sentiment in the 17-nation euro zone area fell to minus 19.6 from 19.3 earlier and most of the economists forecast a further slump to minus 20
3. European Markit Manufacturing PMI, Tue, 24th Jul, 07:58 am. European services and manufacturing shrank for the fifth month in euro area and services unexpectedly contracted in Germany adding to signs of a further economic slump and recession. Europe’s economy probably contracted in the second quarter as budget cuts eroded summer demand and prompted companied to eliminate jobs. Some economist though see a slight recovery that is the reason index may recover to 47.3 from 47.1
4. Canadian Retail Sales, Tue, 24th Jul, 12:30 pm Canadian Retail Sales unexpectedly fell in April, as automobile and clothing receipts fell, according to government figures. Sales decreased 0.5% to $38.9 CAD more than offsetting 0.4% previous month as per Statistics Canada in Ottawa. Based on 25 forecasts economist forecast growth of 0.2%. Bank of Canada Governor M0ark Carney is counting on consumers to account for than a half of country’s projected 2.4 percent expansion this year
5. Australian Consumer Price Index, Wed, 25th Jul, 01:30 am. Australian Core consumer prices rose at the slowest rate since 1998 driving the currency lower as economists were increasing bets that central bank will be cutting interest rate. Consumer Price index rose 0.1 percent from the previous three months, compared with 0.6 increase as earlier thought. Second quarter expectations are of the same 0.6 percent increase.
6. British GDP, Wed, 25th Jul, 08:30 am. British economy probably contracted for the third consecutive quarter through June as the double-dip recession deepened, economists said. Gross domestic product fell 0.2 percent according to the median estimate of the economists. It shrank 0.3 percent in the first quarter and 0.4 percent in the months ending June 2011. Bank of England recently expanded its emergency bond purchase program and introduced measures to boost lending. It must be said that recovery has stalled and government may need into measures to squeeze the budget. The forecast is further 0.2 percent fall in the months to June
7. New Zealand Interest Rate Decision, Wed, 25th Jul, 9:00 pm New Zealand indicated that it may keep its interest rates at a record low for another year on euro area crisis, extending 15 month pause as weaker domestic growth eases inflation. Allan Bollard, governor of the New Zealand central bank said that in the 90 days prognosis the intentions are not to push the OCR rate up for some time. It is expected that the rate will remain unchanged
8. American Durable Goods Orders, Thurs, 26th Jul, 12:30 pm Orders for durable goods in May have failed to make up for the worst four months during recession, indicating U.S. manufacturing will cool. Orders fell 6.6 percent in the first four months of the year, the weakest streach since the same period in 2009, during the last recession. The slowdown in global growth emanating from Europe may harm exports and may prompt companies to curtail equipment spending, hurting sales at manufacturing end. The forecast is 0.4% a fall of 0.7% from first quarter spend
9. German Consumer Price Index, Fri, 27th Jul, 12:00 pm German inflation rate has dropped the slowest level in 17 months in June as energy prices declined. Inflation calculated using European harmonised method eased 2 percent, the lowest since January last year, and 2.2 percent from months earlier, according to Office of Statistics in Wiesbaden. As oil prices fell at around 22 percent, inflation has lost its grounds. The forecast is of no change in figures
10. American Gross Domestic Product Annualized, Fri, 27th Jul, 12:30 pm U.S. economy grew 1.9 percent in the first quarter, showing gain in consumer spending that now shows signs of cooling as the labor market weakens .Revised Gross domestic product matched earlier forecast increase, although economy remains in the difficult spot. According to median forecast of the economists shrinking of 0.4 percent is expected.
This is all for this week. Stay with us for more updates to follow during the trading week
Chart of the week
Oil ends week with gains, despite slight retreat on Friday
FUNDAMENTALS**
Oil prices fell on Friday, snapping a string of seven straight higher settlements, as the euro zone debt crisis brought economic concerns back in focus and strengthened the dollar.
Brent and U.S. crude futures posted weekly gains of more than 4 percent, both contracts having touched eight-week peaks on Thursday.
U.S. and European equities slid and the euro weakened broadly after Spain's heavily indebted Valencia region called for aid, increasing investor fears that the Spanish government is moving toward a full-blown bailout.
