Besides the Reserve Bank board meeting and decision tomorrow, and the Rio Tinto situation, the December half profit reporting season gets underway in Australia this week.
The RBA decision is still not a forgone conclusion with a 25% chance there won't be a rate rise.
But the way financial markets have settled: the emergence of a huge US bid in the shape of the $US45 billion offer for Yahoo from Microsoft and the $US14 billion play in Rio Tinto in London by Alcoa and its former associate, Aluminum Corporation of China (Chinalco), could be enough to convince the bank that the markets are settling down after the volatility we saw in January.
The Fed's rate cuts of 1.25% and the drop in job numbers in January confirm the US economy is slowing, but our economy is growing rapidly as figures out this week will again confirm.
The Rio situation and the firm finish on wall Street will help our market open positively today.
The chance of a rate rise to 7% on the cash rate has tightened.
BHP Billiton will lead the way on Wednesday and analysts are expecting a rise in interim earnings to about $US6.7 billion. (That will be after the $US380 million impact of lower copper price on metal mined but not actually sold at the end of the six months and by the cost of buying third party uranium to fill sales contracts.
News Corp will be out early Wednesday in the US, while results are also expected from Hills Industries, Stockland, Resmed, Futuris and NZ Telecom.
According to the AMP's head of Strategy, Dr Shane Oliver overall profit growth is likely to come in around 8-10%, which is well down on growth of around 19% a year ago with cost pressures, the US downturn and the impact of the strong $A being the major drags on profit growth.
Figures from the Australian Bureau of Statistics this week will flesh out the economy and give us a picture of how it is travelling.
Data for house prices, building approvals and retail sales will also be released.
National average house prices are likely to be up around 4% in the December quarter, with Sydney dragging the chain and a strong result expected from Melbourne.
After Friday's surprise loss of jobs in January, there will be more attention on figures this week for unit labour costs, productivity and pending home sales.
The US fourth quarter earnings season is continuing and many investment bankers and brokers will be pro-claiming that the huge Microsoft bid for Yahoo is a sign the takeover game is back. Far from it: that deal has the hallmark of one fading high flyer in Yahoo being chased by another whose internet strategy remains as ill-defined as ever.
In Europe the Bank of England is expected to cut interest rates following its monthly meeting on Thursday, but the European Central Bank looks like leaving its key interest rate unchanged at 4% after more signs that the eurozone economies are experiencing strong inflation amid slowing growth. Spain in particular is being gripped by a credit crunch and housing crisis.
American employers cut payrolls in January for the first time in 4-1/2 years, another sign the US economy is teetering on the brink of recession.
MONDAY:
Interim profits from Argo Investments and Bradken.; the ABS releases International Trade figures for December and calendar 2007 and the House Prices Index for December quarter; QGC to confirm deal with BG Group of UK.
TUESDAY:
Reserve Bank board meeting and interest rate decision; the ABS releases Retail Sales figures for December, and Building Approvals for the same month, and overseas arrivals and departures for December and 2007; interim profits from Primary Health Care and Singapore Telecom (Optus).
WEDNESDAY:
BHP Billiton interim earnings; News Corp 2nd quarter and first half profits; Interims also from Stockland and Hills Industries; full 2007 year figures from Aust Agricultural Co; Tower Australia Group AGM in Sydney.
THURSDAY:
Full 2007 year figures from Corporate Express and interims from Futuris and Aquarius Platinum. The National Australia Bank AGM in Perth.
FRIDAY:
Interim earnings from Resmed and 2007 earnings from Telecom NZ.
