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15.10.2007 - Currency and Stock Markets Weekly Outlook

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Date: 2007-10-15 10:29

The upcoming will tell us about the shape of the global economy. Macroeconomic publications that can affect global markets will be published. A couple of reports describing the Polish economy may affect the Złoty and the WIG20.

 

As usual, investors will pay attention to what is going on in the US. On Monday in the afternoon, Fed Chairman, Ben Bernanke will speak. On Tuesday, the Industrial Production report will be published indicating a slowdown. Wednesday will be important since the CPI (increase to 0.2%) and Core CPI inflation (remain at 0.2%) will be announced. Afterwards, news from the housing markets will be made public with the Housing Starts and Building Permits publications. Both, are expected to decline to its lowest levels in years. The interest rate cut by the Fed is not showing its effect yet. Also on Wednesday, the Beige book will be published. It describes the current economic conditions in the US and is used by the Fed when setting interest rates in two weeks time from the Beige Book report. The week for the US will end with Bernanke’s speech on Friday.

Important reports from European and Canadian economies will be published this week. Tuesday’s Swiss Retail Sales and UK’s CPI can affect the Swiss Franc and the British Pound. At the same time minutes from the last UK’s central Bank meeting will be made public. Also on Tuesday, the Royal Bank of Canada will announce the level of interest rates. Analysts expect no change from the current 4.50%. Thursday will be calmer, with only the Swiss and UK’s Trade Balance. More important for the GBP will be the UK Retail Sales report. Friday will bring us UK’s GDP publication and Canadian CPI.

Most reports are forecasted to show data worse than the previous time. It is not surprise since the markets experienced a lot in the last two months. The American and European markets, besides the macro publications, will be affected by quarterly reports of global companies. This week will bring us quarterly results of Citigroup and Genentech (Monday); Johnson & Johnson, Intel, and Yahoo (Tuesday); Asml, Coca Cola, JP Morgan, Altria, and Ebay (Wednesday); Bank of America, Eli Lilly, Nokia, Novartis, SAP, and Google (Thursday); 3M, Caterpillar, Honeywell, and Wachovia (Friday).

The mood of US investors will certainly affect the moves of Polish players. This week though, will bring some publication regarding the Polish market. The start of the week will be strong since the Polish CPI (Expected: 0.4%; prior -0.4% M/M), Average Earnings (Expected: 10.7%; Prior: 10.5%), and Current Account (Expected: -1,139 M Euros; Prior: -1,300 M Euros) will be published. The Polish economy is growing and the reports are expected to show that. On Thursday, reports regarding the PPI (Expected: 1.9%; Prior: 1.7%) and Industrial Production (Expected: 6.3%; Prior: 9.0%) will be announced.

This week is rich in events from the finance world. Markets will be closely watching what is going on in the United States. Especially Polish investors, who can see the WIG20 reaching a new all-time high this week. Today, in the morning the Warsaw Stock Exchange’s major index broke the 3,900 barrier again and is just a few points away from the historic record.


Adam Narczewski