Interest rates, American cars and economic growth: all on the menu for the coming week.
In Australia the Reserve Bank board meets tomorrow and won’t touch interest rates ahead of the release Wednesday of economic growth figures for the March quarter.
The AMP’s Dr Shane Oliver says "We expect that the Reserve Bank of Australia will leave interest rates on hold at 3% for the second month in a row following its Board meeting on the grounds that there are tentative signs of improvement in both the global and Australian economies and that significant monetary and fiscal easing has already occurred.
"That said our view remains that interest rates will still fall further over the next six months as the recession continues to roll on, unemployment heads higher and inflation falls, ultimately taking the cash rate down to around 2%."
We will also get April retail sales today, the balance of payments and government finance figures, both for the March quarter tomorrow, plus building approvals for April.
Wednesday sees the March quarter national accounts and growth figures released. Thursday sees the trade figures for April and international arrivals and departures, also for April.
The retail sales and building approvals will give us a further picture of the economy after the expected slow-down in the March quarter.
The retail sales figures are not expected to be as strong as the 2.2% rise in March, but the building approvals figures will rise on the strong rise in March as the first home buyers construction boom grows.
March quarter GDP data is likely to provide a reminder that current conditions are very difficult with GDP likely to have fallen by 0.3%, making it the second quarterly contraction in a row and hence meeting the common definition of a recession.
Today’s economic indicators will include figures on business inventories which, together with the balance of payments for the March quarter and the government finance figures, will have a major bearing on the growth figures for the first quarter (and for the current and third quarters as well).
The country’s third supermarket chain and biggest independent grocer, Metcash reports later today.
We will also get readings on the health of the country’s manufacturing and service sectors, and we will also have the latest reading from the TD Securities Inflation Gauge.
Overseas we will also get reading on manufacturing and service sectors from China, the US, UK and Europe. Most are likely to continue pointing to a steadying in the economic contraction and perhaps a smidge of growth here and there.
But there’s a fear Chinese business conditions surveys for May are likely to show some weakening after five months of gains.
That will be either ignored, or seized upon as evidence the mixed nature of the Chinese rebound is not as strong as it seems.
The General Motors bankruptcy tonight will be the big event early in the day (and so should the emergence of Chrysler from bankruptcy with a New York court decision).
But Friday should see US employment data for May reveal another big rise and a jobless rate above 9%.
Most estimates reckon the number of jobless will fall back to between 500,000 and 550,000 and the unemployment rate will end up at 9.3%.
US figures for construction spending and pending home sales will also be released. One will be poor, the other will again hint at a steadying in the slide in housing.
Central banks in the UK, Europe and Canada are all expected to leave interest rates on hold.
European producer prices and retail sales are also due for release mid week and will paint a very mixed picture of the continent’s various economies.
Producer prices fell in March, as did retail sales. Producer prices won’t show any real move upwards; retail sales may edge a touch higher with an upturn in consumer confidence reported already.
Annual eurozone consumer inflation was zero last month, the lowest since 1991. That was down from 0.6% in April. It may fall further in coming months.
The National Association of Realtors is scheduled to report pending sales of existing US existing homes for April tomorrow after a 3.2% rise in March.
Federal Reserve Chairman Ben Bernanke is at the US Congress on Wednesday.
