Growth in Asia will dominate the coming week, with China and Singapore revealing second quarter growth estimates.
China reports Thursday on June and the June quarter; Singapore’s first report comes a day earlier.
China’s June and first half trade figures were released at the weekend and confirmed that the economy is still doing very well, but buried in the data were some warning signs for Australia.
Last week Malaysia lifted rates a third time this year, joining Australia in the growth vs. rates stakes.
On Friday South Korea’s central bank raised the country’s main interest rate for the first time since the global crisis.
The bank lifted its seven day repurchase rate to 2.25% from 2.00%.
South Korea joined India, Malaysia and Taiwan in lifting rates in recent weeks; Australia sat pat last week, but the strong jobs figures for June boosted the chances of a rate rise next month.
Australian figures out this week include housing finance, lending finance (both May) and new car sales for June.
These reports will fill out the economy a bit more.
But the important reports will be the National Australia Bank’s monthly look at business conditions and confidence tomorrow and the Consumer Confidence report from Westpac and the Melbourne Institute which is due out Wednesday.
We are still a month away from the start of the June 30 reporting season (at the end of this month, then building into August).
There are a few meetings this week including AGMs for White Energy Company and Hazelwood Resources. Singapore-controlled power group and SP AusNet.
Rio Tinto’s second quarter and first half production report is due out on Wednesday and we can expect other miners and oil groups to start delivery of quarterly and half year reports from this week on.
In the US we will get the June trade figures tomorrow night, and the US budget position for the same month.
Retail sales are out Wednesday, jobless claims as usual on Thursday, as well as Industrial production figures from the Fed and Producer Prices.
The concentration will be on the size of the capacity utilisation gap in the IP numbers and whether there’s any further sign of deflation in the PPI. A rise of 0.1% is forecast.
Friday sees the June consumer price index (CPI).
Forecasts from economists see the core rate rising 0.1%, which means there will be more speculation about deflation, if the figure comes in at that level.
In Europe, the EU CPI is out Wednesday, while the European Central Bank will release its monthly report on Thursday.
The EU trade figures are out next Friday.
In Britain first quarter GDP figures are out tonight, current account figures for the quarter, while employment data will be out Wednesday.
The US quarterly earnings season proper starts this week.
Alcoa, Intel, JP Morgan, Google, Bank of America, GE and Citi are all due to issue quarterly earnings.
Thomson Reuters says its analysts say the earnings of S&P 500 firms are expected to grow 27% in the second quarter from the previous three months, after expanding at a rate of 58.3% in the January-March period. "So far, with 26 of 500 firms already reported, 69 percent of earnings are coming above expectations," it reported Friday.
Alcan is out early tomorrow morning, our time.
Over the past three months, the price of aluminum has dropped sharply, from over $US2,400 per tonne in April to around $US2,000 on Friday.
Citigroup is due to report on Friday, and will test market consensus which is split on whether the trading earnings boom will be maintained, or whether it was knocked on the head in the June quarter.
Analysts are looking for banks to report lower write-offs and losses from asset impairments, but offsetting this will be a forecast decline in trading revenues, fees and commissions.
Results from JP Morgan and the Bank of America will also help work out whether banks have taken a body blow in the second quarter that many analysts expected.
GE’s financial business should be recovered by now, but it will be its industrial side, especially exports (and the outlook for the rest of the year) that will drive the market.
Intel and Google will be vital for the tech sector and the continuing strength of belief that conditions are going well.
The US Treasury Department will sell $US35 billion in three-year debt on Monday, $US21 billion in 10-year bonds on Tuesday and $US13 billion in 30-year bonds on Wednesday.
The US Senate is due to vote on the new financial regulation bill later this week, but that still depends on the Democrats getting 60 Senators to vote for a vote to be taken.
The Agricultural Bank of China is due to list in Shanghai and Hong Kong late in the week.
