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By HaleStewart May 26, 2015 8:21 am
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International Economic Preview For the Week of May 25-29

     The following events will have a disproportionate impact on the markets next week.


US Durable Goods: thanks to a strong dollar and weak overseas economies, the US is in the middle of a shallow industrial recession.  But, this has been going on for about a year, with 8 of the last 12 DG readings showing a contraction.  At some point, this may bleed into the broader economy:

US New Home Sales: although the last reading was an 11% decrease, this was after three months of increases.  Moreover, the one month’s weakness may have been the result of bad weather.  Considering the strength of last week’s housing news, we might get an upside surprise.

Japanese Meeting Minutes: the latest GDP report, which showed annual growth over 2%, may give the BOJ the impetus to start talking about an economic recovery.  Until now, the BOJ has described growth as moderate.


Canada’s Interest Rate Decision: recently, the BOC cut rates in a preemptive move to stave off a potential oil related slowdown.  Recent news, however, has shown the Canadian economy to be more resilient than the bank gave it credit for.


EU Economic Sentiment Indicators: starting in January, the news from the EU has been positive.  The Markit manufacturing and service surveys have been printing readings over 50, indicating the economy is expanding.  Retail sales have been fair and the markets are rallying.  As a result, expect positive movement in all these indicators.

Japanese Inflation: Although the overall Y/Y change in inflation has been dropping for the last year, it is still at higher levels, which is one of Abenomics primary goals.  And like other central banks, the BOJ is projecting a return to higher rates once energy prices pick up.


Canadian GDP: earlier this year, the Bank of Canada made public their conclusion that oil’s price drop would have a negative impact on their economy.  Recent readings have shown a stalling of this indicator.

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