Contents This Week:
- Economic calendar for week 8th – 12th June
- Commentary: The week ahead.
Economic Calendar for week 8th – 12th June
**Note: All times GMT, not DST**
PLEASE NOTE – All times GMT
Monday June 8th:
EU – 08:30 – Sentix Investor Confidence.
GE – 10:00 – German Factory Orders M/M.
US – 16:30 – FOMC Member Tarullo Speaks.
UK – 23:01 – BRC Retail Sales Monitor Y/Y.
UK – 23:01 – RICS House Price Balance.
Tuesday June 9th:
GE – 06:00 – German Trade Balance.
FR – 06:45 – French Trade Balance.
UK – 08:30 – DCLG HPI Y/Y.
GE – 10:00 – German Industrial Production.
US – 14:00 – IBD/TIPP Economic Optimism.
US – 14:00 – Wholesale Inventories M/M.
Wednesday June 10th:
GE – 06:00 – German Final CPI M/M.
FR – 06:45 – French Industrial Production.
UK – 08:30 – Manufacturing Production M/M.
UK – 08:30 – Trade Balance.
UK – 08:30 – Industrial Production M/M.
US – 12:30 – Trade Balance.
US – 14:30 – Crude Oil Inventories.
US – 16:15 – FOMC Member Duke Speaks.
US – 18:00 – Beige Book.
US – 18:00 – Federal Budget Balance.
UK – 23:01 – NIESR GDP Estimate.
Thursday June 11th:
FR – 06:45 – French Final Non-Farm Payrolls Q/Q.
EU – 08:00 – ECB Monthly Bulletin.
UK – 08:30 – Consumer Inflation Expectations.
US – 12:30 – Core Retail Sales M/M.
US – 12:30 – Retail Sales M/M.
US – 12:30 – Unemployment Claims.
US – 14:00 – Business Inventories M/M.
US – 14:30 – Natural Gas Storage.
US – 17:05 – FOMC Member Lockhart Speaks.
UK – 23:01 – BOE Quarterly Bulletin.
Friday June 12th:
GE – 06:00 – German WPI M/M.
FR – 06:45 – French CPI M/M.
FR – 06:45 – French Gov Budget Balance.
EU -09:00 -Industrial Production M/M.
US – 12:30 – Import Prices M/M.
US – 13:55 – Prelim UoM Inflation Expectations.
US – 13:55 – Prelim UoM Consumer Sentiment.
EU – Europe wide
FR – France
UK – United Kingdom
US – United States
GE – Germany
The week ahead.
US equities enjoyed a positive week, thanks largely to the Monday’s opening gap higher than Friday’s close. There was a mixed reaction to Friday’s Non Farm Payroll numbers. Job losses came in at much less than anticipated causing short term volatility on equity futures and currency markets. Treasuries plunged and stocks surged at the open, but this initial move was short lived. Unconfirmed rumours speculated that the best NFP numbers in comparison to expectations since September were caused by a computer error. ISM manufacturing data contracted at its slowest pace for eight months. European markets had a mixed week, with the FTSE hampered by blue chip companies going ex dividend, amid growing uncertainty over the Labour leadership.
On Tuesday, the FTSE got off to a rocky start with the news that IPIC would be pulling some of its investment in Barclays, and banking any profits made to date. Considering the fact that Barclays slumped to 50p following their initial purchase, the Gulf investors have held their nerve well, and booking gains at just below current prices seems understandable in the circumstances.
This of course isn’t great news for Barclays, as it raises fresh capital adequacy issues. Barclays has been benefitting from an independence premium, rising faster and further than rivals that had to take part in the UK government asset protection scheme. Now that ‘premium’ is being called into question though, Barclays may be better placed to weather the storm now that optimism appears to be creeping back into the global economic psyche. Barclays recovered well in the later part of the week.
There is certainly evidence of confidence returning to markets, with cash allocation falling for most managed funds, as investors pour money back into the stock market. We could be seeing a great unwinding of the extreme flight to safety that happened post Lehman Brothers. Now it appears traders want to pick up where they left off, pushing resources and stocks higher, and betting on higher inflation in the future. Oil is continuing its bull run. It’s remarkable to note that crude prices have doubled in just 75 trading days, from $33.75 to current levels. Gold hit $989, but reversed to close at $954.88 last week and oil pushed to over $70 at one point.
It is no coincidence that the so called BRIC nations have seen their stock markets rally strongly in 2009, with the Russian stock market up 70% this year. Demand from emerging nations such as China fuelled the commodity boom prior to the credit crunch, now it appears they are leading the recovery with oil following in the tail wind.
Three central banks; the MPC, the ECB, and the BOC produced rate statements last week, with all three choosing to keep rates on hold. This was largely predicted in advance, but there were still some big swings on currencies. The biggest move on GBP/ USD was attributed to rumours that Gordon Brown was quitting. Although the rumours are unfounded, cable dropped dramatically around that time, and is yet to recover.
After a very busy week, last week the coming week has less top tier economic announcements. Highlights include UK manufacturing numbers on Wednesday, followed by US retails sales and unemployment claims on Thursday.
Recently Barry Ritholtz summarised the current market sentiment neatly “While many view the decelerating job losses as signalling the end of the recession, they appear to me as signalling the end of the panic period of the credit crisis. We are now in an ordinary, as opposed to historic, recession”.
Despite positive moves last week, further upside could still be limited for world stock markets. A no touch trade predicting that the S&P 500 won’t rise above last week’s highs and touch 961 at any point during the next 9 days could return 109%.
Weekly Report from David Evans, market analyst at www.BetOnMarkets.com