Diary: RBA Meets, Oz GDP, Retail Sales
A big week for the Australian economy lies ahead with the monthly Reserve Bank board meeting, current account, business profits and wages, government finance details and the March quarter GDP numbers, as well as retail sales and trade data for April.
And for all that data there won’t be any impact on interest rates which will remain anchored at 1.50%.
In fact tomorrow’s RBA board meeting will leave interest rates on hold for a record 22 months.
The AMP’s chief economist, Dr Shane Oliver says “Our view remains that a rate hike is unlikely until 2020 at the earliest and that in the interim a rate cut cannot be ruled out.”
Like most other economists, Westpac and the NAB doesn’t see rates moving until well into 2019 at the earliest.
Wednesday sees the March quarter National Accounts and GDP figures. Market economists think quarter on quarter GDP growth will be 0.8% quarter on quarter or 2.7% year on year, up from 2.4% at the end of 2017.
The AMP’s Dr Oliver sees growth being driven by a 0.6 percentage point contribution from net exports strong public demand offsetting soft growth in consumer spending.
Investment spending on plant and machinery should make a small contribution, while retailing will contribute around 0.4% on a volume basis.
Retail sales figures are out later today and a small 0.1% rise is forecast.
That will be further confirmation that for all the strength in the jobs market and very solid business conditions, consumer spending remains very weak.
Car sales figures mid week will also confirm that the surge faded in April.
Thursday’s April trade data will show a surplus of around $1.3 billion.
In the US, Dr Oliver says it will be a relatively quiet week for data front but the May non-manufacturing conditions ISM index (Tuesday) to remain strong at 56-57, job opening and hiring data for April (also Tuesday) to have remained very strong and the trade deficit for April (Wednesday) to have improved slightly.
Chinese trade data for May on Friday is expected to show export growth remaining solid at around 10% year on year but import growth slowing back to around 12% yoy.
Inflation data will also be released Saturday but should be benign.
The March quarter reporting season is all bit over with only the odd group releasing figures, especially in the US.
Elsewhere Apple Apple’s annual worldwide developers conference gets under way in San Jose later today with the new mobile operating system for iPhones to be exposed to the industry.
President Donald Trump is due to meet Japanese Prime Minister Shinzo Abe on Thursday ahead of the planned denuclearisation summit with North Korea on June 12.
G-7 summit Leaders from G-7 countries gather in Quebec on Friday for a two-day meeting, where trade protectionism is likely to be a key topic of discussion.
The meeting comes after the Trump administration stepped up its trade war with some of its biggest trading partners and key allies — the EU, Canada and Mexico — by introducing tariffs on steel and aluminium imports.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.