A big, big week for the economy in Australia.
We have the Reserve Bank board meeting tomorrow, the first quarter GDP numbers on Wednesday, trade, retail sales and building approvals, plus private credit figures all being released during the week.
The central bank of Australia is widely expected to leave interest rates alone at the June board meeting tomorrow.
The AMP’s Dr Shane Oliver is looking for the RBA to leave rates on hold as it has achieved its short term objective of returning bank lending rates to around their longer term average.
He said "uncertainty has increased regarding the global economic outlook and a range of domestic indicators including consumer confidence; retail sales and housing finance indicate that the rate hikes to date are starting to bite".
"In fact the next rate hike is unlikely to come until August at the earliest," he said on Friday.
All 17 economists polled last week by AAP said the Reserve Bank of Australia will leave the overnight cash rate of 4.5% unchanged at tomorrow’s meeting.
Other forecasters agree. Bloomberg has a similar consensus.
On the data front the first quarter GDP figures are expected to show the economy softened in the March quarter, as consumption and investment fell.
The AMP expects quarterly GDP growth of just 0.4% (+2.3% year on year) driven by a soft patch in retail sales and business investment.
Growth in the December quarter was 0.9%, or an annual rate of 2.7%.
April data for retail sales are likely to rise by around 0.3% and building approvals are likely to fall back slightly after that sharp (non-dwelling driven) 15% rise in March.
The April trade balance is likely to show a big improvement, thanks to the commencement of higher contract prices for iron ore and coal, while we will also get the March quarter balance of payments, as well as the business inventories and profits numbers.
The deadline in the deal between AXA Asia Pacific Holdings and the National Australia Bank is due to expire tonight, but looks likely to be extended.
When the agreement between fund manager AXA APH, its French parent AXA SA, and NAB over the bank’s $13.3 billion bid for AXA APH runs out at midnight tonight, it will trigger an option for all parties to terminate the agreement.
The ACCC has blocked the bid, but hasn’t said when its detailed reasons will be released.
Independent retailer and wholesaler, Metcash, releases its full year results tomorrow.
April private credit will be released by the Reserve Bank later today
Australian and US car sales figures for May will be released later in the week.
In India, first quarter growth figures are out later today and are expected to show growth of between 8% and 9%, on an annual basis.
That would make it the best growth in more than two years, but high inflation remains a big concern.
In the US, markets are closed tonight for the Memorial Day holiday, so trading will be light and directionless.
America and China will see surveys released over the next few days on the state of manufacturing and services.
China’s will be closely watched for signs of an easing in activity, exports and orders.
Surveys for Europe and the UK will also be looked at closely for signs the euro crisis is damaging business activity and confidence.
Friday sees employment figures for May from the US Department of Labor.
Most forecasters expect non-farm payrolls to have risen by 500,000 in May, after a gain of 290,000 in April.
