After the nervous end to last week, the coming five days holds the threat of more downward pressure on markets from a host of figures, reports and decisions.
Before all that Myer lists on the ASX noon, the biggest float for over a year. The shares were issued at $4.10.
They will struggle to hold that level given the weakness expected today.
The Reserve Bank will lift interest rates, but the US Federal Reserve, the European Central bank and the Bank of England will all decline to follow suit.
And that will again tell us all we need to know about the relative health of the three economies covered by that trio of central banks.
The wording in the post-Fed meeting will be poured over, but the release of October jobless figures and unemployment rate less than two days later, will be the most important piece of information released anywhere this week, especially after the big sell off on Friday night.
In Australia, The RBA will lift rates by another 0.25% to 3.50% tomorrow.
But today the federal government releases its mid-year forecast for the Australian economy and a review of its 2010 budget position.
The Mid-Year Economic and Fiscal Outlook (MYEFO), due to be released by Treasurer Wayne Swan in Canberra, should reflect an economy that has improved from when the budget was brought down in May.
Forecasts for growth, unemployment, the budget deficit and government debt are likely to be more positive than predicted in the May budget.
Better news on growth and unemployment are expected, and the budget deficit will be forecast to be well down on the original estimate of $57.6 billion.
This is something the RBA will take into account for its board meeting tomorrow and for the Statement of Monetary policy later in the week.
Recent comments from the RBA warning that leaving rates at low levels may be “imprudent” along with the stickiness in inflation suggest to some commentators that a 0.5% rate hike is possible.
The chief economist of AMP Global Investors, Shane Oliver believes the RBA is likely to stick to a gradualist approach in raising interest rates and "hence move by only 0.25% given the potential vulnerability of the economy to a too hasty removal of stimulus and given that the September quarter inflation figures were not bad enough to justify a more aggressive approach".
Macquarie Bank’s Rory Robertson has a similar view, believing we will get back to rate hikes of 0.25% in October and November.
But he said there was not yet any certainty about a rate rise in December.
There’s now a feeling the RBA may want to wait to see what happens over the summer period, especially with a bout of nervousness on markets seemingly reappearing.
This week’s release of economic figures in Australia will help though with September quarter house price index, plus retail sales, building approvals and trade all for the month of September, will be released.
The performance of manufacturing and service sectors will be released locally and for most major economies.
These will tell us if consumption was growing in September, or whether the easing in the rate of activity in August, continued into the end of the quarter.
Surveys of manufacturing strength are out elsewhere, with the UK, Europe and the US in the next 24 hours.
China’s official survey was released yesterday and showed the country’s manufacturing sector was still growing.
Local trade figures on car sales will be released later in the week for October; America’s figures will be out as well.
Apart from the RBA board meeting, Governor Glenn Stevens speaks this week (his second in a couple of weeks) and the bank releases its 4th quarter’s Statement on Monetary Policy.
The Governor speaks Thursday; the SMP is out on Friday.
That will contain new forecasts for the next couple of years.
Dr Oliver says it "is likely to leave the clear impression that more interest rate hikes lie ahead with the Statement likely to see the RBA revise up its 2010 GDP growth forecast to 3% (from 2.25%) and its 2010 inflation forecast to 2.5% (from 2%)".
Westpac completes the bank reporters (September 30 balance dates). It should be another good result and confirm the sector remains very strong.
What the bank does to its dividends will be closely watched after the ANZ and NAB cut their finals by around 25% each.
Annual meetings will include Telstra, West Australian Newspapers, Kresta Group, TransPacific Industries, Transfield Services, Waterco, Domino’s Pizza, Tassal Group, Leighton, Gindalbie Minerals, Energy Developments, Cazaly and Atlas Iron.
In the US The Fed will leave interest rates on hold near zero yet again but the big focus will be on whether it softens its assessment that monetary policy can remain exceptionally easy for an “extended period”.
It is also a big week for data releases in the US with data for pending home sales, the ISM and Friday’s jobs figures to be the key focus.
Some estimates are for job losses to have slowed to 150,000 in October but this probably won’t have been enough to stop unemployment rising to 10%.
But the September figures were much worse than expected and what held down the unemployment rate surging was the drop in the participation rate which tells us more and more people are simply quitting looking for work.
That’s supported by the continuing fall in consumer confidence and the sharp fall in consumer spending in September, which could see the 3.5% annual growth rate for the September three months wound back a touch.
Meanwhile reports at the weekend said the Fed ha
