A quieter week all round for economic and business news.
In fact the most important decision may very well come in New Zealand where that country’s Reserve Bank is expected to cut rates again: a trim of 0.50% is tipped by the market.
After our Reserve Bank left our cash rate unchanged at 3.25% last week, the Kiwis could have a cash rate under that level at 3%. The Kiwi rate is currently 3.5%.
Having seen the RBA fluff its chance last week, NZ analysts say the country’s central bank will almost certainly continue to cut rates.
But that looks like being the big official decision: after last week’s flow of figures, rate cuts, a non cut and the impact of our poor 4th quarter growth figures, a rest would be in order this week.
But we will still get figures on housing finance and the jobs data at the end of the week for February.
For Australia that will be the crucial figure of the week: will the rise in jobless escalate sharply, or continue to slowly emerge, as it has been doing since late last year.
The jobless rate has risen by around 4.2% to 4.8% over past year: a net 84,000 people have been added to the jobless pool.
The ANZ newspaper and internet job ads series for February will be released later today and is expected to show a continuation of the weak trend of the past year.
More are under-employed or working shorter hours (such as those at the Ten Network and at News Ltd magazines). Others have had pay cut or have moved from full time casual work to part time.
The AMP’s Dr Shane Oliver said on Friday: "Given the economic downturn and sharp falls recently reported in job vacancies we expect February employment data to show a 20,000 slump in jobs and a rise in the unemployment rate to 5%, from 4.8% in January".
Consumer confidence figures are also expected and won’t have any joy.
They will have been taken last week in the wake of the no rate cut from the RBA and the news of the 0.50% fall in 4th quarter growth.
For those reasons a fall wouldn’t surprise.
The housing finance figures will be looked at closely to see if the small rise in private sector dwelling finance in January, has been followed by another rise in housing finance figures in February
In the US data for retail sales will be worth keeping an eye on given signs of apparent strength in figures out last week for same store sales for last month.
Wal-Mart reported a sharp 5.1% rise in same store sales and that could very well push the overall figure into the black for a second month in a row, which would get more people talking about a bottom in the US recession.
The latest consumer sentiment survey will be released: it was a record low in last month’s report. And the latest US trade balance will also be released. Look for a very sharp fall in US exports and an equally sharp drop in imports
But probably the biggest story in the US in the coming week that is known will be the struggle by General Motors to remain afloat (and Chrysler as well).
GM revealed late last week that it faced possible of bankruptcy if it couldn’t get more finance from the government.
It’s trying to get the best part of $US5 billion or more from European governments (mostly Germany) to keep its Opel operations in Europe alive.
The Obama Administration’s auto task force, GM, Chrysler and officials from the United Auto Workers meet in Detroit this week for more discussions. Talks were held between the task force, Fiat and Chrysler last week over the plan for the Italian car giant to take a 35% stake in Chrysler.
Now its being reported there is growing concern in the White House at the prospect of GM at least failing after the auditors warning last week in the carmakers annual report.
Auditors raised doubts about GM’s ability to survive outside bankruptcy; it was a statement that had left the White House very little room to move, especially after the terrible unemployment figures on Friday when 651,000 people lost their jobs in February, the third month in a row the losses have been above 600,000.
US economists estimate that GM’s bankruptcy could lop off four percentage points from the US economic growth and boost unemployment significantly, especially a suppliers, who have asked for $US25.6 billion in bailout aid themselves (nearly three times what Chrysler is asking for).
Federal Reserve Chairman Ben Bernanke will speak to a meeting of the Council on Foreign Relations on Tuesday.
In Germany the government seems to be moving closer to a decision on the future of Hypo Real Estate, the country’s crippled second largest real estate lender. It has received 100 billion euros of state aid.
The government signalled late last week it could reveal a decision in the coming week on how it will deal with HRE’s future.
And in Japan, the government releases the final estimate for 4th quarter economic growth on Thursday: it is likely to be worse than the 12.7% contraction estimated last month.
In New Zealand, the central bank is due to meet and announce its rate decision on Thursday.
