The week ahead will see Australian inflation figures, US 4th quarter growth, Indian and New Zealand interest rates, US earnings, Japanese inflation and employment data.
In a short week for Australia with the Australia Day holiday on Wednesday, the release of the consumer (tomorrow) and producer (today) price figures will dominate the markets here.
Investors and analysts are looking for signs of an impact from the Queensland floods in November and December on price levels, especially for fruit and vegetables.
The AMP’s chief economist Dr Shane Oliver says that increases in prices for food, housing costs and petrol prices are expected to push up the consumer price index by 0.7% in the December quarter pushing the annual rate of inflation up to 3%.
Underlying inflation, which is the Reserve Bank’s preferred measure, is likely to also rise by around 0.7% in the quarter or 2.5% year on year.
Both measures will not have any impact on RBA thinking on interest rates.
The central bank’s board has its first meeting for 2011 a week tomorrow and releases its first Statement on Monetary Policy on Friday February 4 which will contain new estimates on growth and inflation for the next two years.
That, plus the post meeting statement on February 1 from Governor Glenn Stevens, will lay out the central bank’s views on the economy and monetary policy for the year ahead.
The conventional view of two or three rate rises this year has been turned on its head by the damaging flooding in Queensland, northern NSW and much of Victoria in the past three months.
The central bank will be more concerned about the possible inflationary impact of the rebuilding work, especially in Queensland and Brisbane in particular later in the year than the temporary price rises now.
Federal Treasurer, Wayne Swan speaks in Brisbane on Friday and will outline more detail on the costs so far from the floods.
In the corporate area, Sydney-based building products and water group Alesco Corp is due to release interim results for the six months to November on Thursday, January 27.
Crane Group, which is facing a hostile offer from Fletcher Building, said on Friday it will release its interim figures on Friday, January 28.
And Melbourne-based investment company Australian Foundation also is due to release its interim figures for the December 31 half year on Thursday.
And Woolworths releases is second quarter and first half sales figures today.
In the US, the main focus is likely to be on December quarter GDP data (due Friday) which we expect to show an acceleration in growth to a 3.5% annualised pace after 2.6% annualised growth in the September quarter.
But the Fed has a two-day meeting Tuesday and Wednesday, but is not seen doing anything except changing the language in its post meeting statement to signal greater optimism about the outlook for the US economy.
That is not expected to be enough to warrant any imminent tightening in monetary policy.
The December quarter profit reporting season in the US will also continue with 150 or so S&P 500 companies due to report this week, with big energy companies such as Chevron Corp and ConocoPhillips reporting results.
Also reporting are American Express Company, McDonald’s Corporation, Yahoo Inc, Johnson & Johnson, Peabody Energy Corp, Microsoft, Nokia, Alliance Financial, AT&T, Caterpillar, Potash Corporation of Saskatchewan Inc, ResMed Inc (Aust and US) and Time Warner Cable all report. Singapore Airlines will report earnings.
US data for consumer confidence (Tuesday) is likely to improve slightly after a soft reading in December, data for new home sales (Wednesday) and pending home sales (Thursday) are likely to rise modestly and durable goods orders (Thursday) are likely to remain solid.
President Obama deliveres his State Of The Union speech in Washington on Tuesday night, our time.
Japanese data for inflation, the labour market and retail sales will be released on Thursday.
The Reserve Bank of New Zealand is not expected to move interest rates after its meeting on Thursday.
The Bank of Japan won’t touch rates at its meeting this week, but the Reserve Bank of India is widely tipped to boost its key rates at its meeting tomorrow to try and combat rising inflation.
In Europe we will get European Monetary Union (EU) industrial new orders data for November, fourth quarter GDP data and EU consumer confidence for January, along with economic confidence and industrial confidence data for the month.
