Another week when the health of the fading Australian resources investment boom will be again tested, as well as the Chinese economy; local building approvals will get a run, and offshore the second estimate of US first quarter economic growth will be released, along with the usual monthly economic figures from Japan on employment, retail sales and inflation.
The value of the Aussie and US dollars, plus the health of the Tokyo stockmarket will impact sentiment in what looks like a repeat of last week’s trading – hopefully without the big losses on Thursday and Friday.
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Here, the big focus will be on the March quarter private capital expenditure data on Thursday, the day after the quarterly report on construction work is released.
Remarks later today in Melbourne at a business function from Reserve Bank Governor, Glenn Stevens, will be watched for comments on the boom, interest rates and the dollar.
Both will tell us the present and future state of the resource investment boom, whether it has peaked and to what extent if any non-mining investment has started filling the gap (or will later in the year).
The investment data will fill out the gaps in last week’s news on the curtailment of a number of projects from the Federal Bureau of Resource and Energy Economics.
While business investment is definitely slowing, economists think there has been modest growth in the March quarter.
Bloomberg estimates the rise will be 4.5%. if that’s reported, it will be a solid figure for first quarter growth (due out a week Wednesday).
The key part of the release from the Australian Bureau of Statistics will be investment intentions for the year ahead.
They will confirm that the investment boom has peaked, but non-mining investment is likely to remain weak for the time being.
Out Thursday as well are the building approvals for April. The AMP’s Dr Shane Oliver says we can expect a 2% bounce in building approvals after the fall in March.
Growth is expected in private sector credit in April when the data is released Friday by the Reserve Bank.
In the corporate area, Westfield Group (it owns 50% of Westfield Retail Trust, plus malls in the US, UK and elsewhere) holds its AGM this week, as does Oz Minerals, which will be under pressure over its falling grades at the Prominent Hill mine in South Australia, and plans to develop another big deposit elsewhere in the state.
Thursday Mirabella Nickel holds its annual general meeting, as will Sundance Energy.
Aristocrat Leisure also releases its interim results and full year figures are expected from Programmed Maintenance – both midweek.
Microsoft chairman Bill Gates is in Australia – he’s on a special Q&A tomorrow night on ABC 1, and speaks at the National Press Club in Canberra on Wednesday.
In China, the official manufacturing conditions PMI (this Saturday) will be watched closely to see whether it follows last week’s flash HSBC PMI in falling below 50 (which indicates a contraction).
Elsewhere in Asia, Japanese data to be released on Friday for manufacturing conditions and household spending are likely to show further signs of improvement, but it’s likely too early to expect CPI data to show fading deflationary pressures.
In the US, expect further gains in house prices (Monday) and pending home sales (Thursday). Data for consumer sentiment and personal spending (Friday) are also due along with an update of March quarter GDP growth on Thursday. The first estimate was annual growth of 2.5%. That could be revised slightly lower, according to some estimates.
In the Eurozone, business and consumer confidence data will be released on Thursday and are expected to confirm the small improvement seen in business conditions surveys (the PMIs).
