A big, big week for economies here and around the world, as well as for investors large and small. In fact it’s one of the biggest weeks of the year for the amount of information and number of key decisions to be made.
We have third quarter economic growth data for Australia, the US, South Korea and the eurozone; interest rate decisions in Australia, Canada, Europe and the UK; the health of manufacturing around the world (especially in China) will be taken; there’s a plethora of monthly data covering retail sales to unemployment (the vital US figures) and trade for the US and Australia and South Korea.
The central banks of Australia, the US, Canada, the UK and the eurozone get into the act with meetings and decisions or key reports this week.
And that US November jobs report on Friday night, our time, could see a sharp sell-off in the value of our dollar if its strong enough.
In fact the data flow is overwhelmingly about the big picture of many economies (and the global economy) and for a change, corporate news will take a back seat.
In Australia, we have the Reserve Bank’s interest rate decision tomorrow afternoon – no end of year change is forecast by the market, which expects the central bank to remain on the sidelines watching how the housing rebound goes over summer.
The next RBA board meeting will be in February, so there’s going to be two months of data for the bank to discuss when it next meets, which should give it time to have a better idea of the state of the economy, especially its transition from mining investment to broader-based domestic growth.
There’s a growing belief that the rate cuts are over and the bank will not change its key cash rate (2.5% at the moment) for some time.
Wednesday sees the September quarter GDP data released – with a reading of 0.6% tipped (for 2.4% for the year, which would be unchanged from the June quarter). Points to look for include the savings rate, labor costs and productivity and the level of household consumption, and the impact of the home building sector on growth.
The AMP’s Dr Shane Oliver goes for a rise of 0.7% for the quarter and 2.6% for the year.
Before then we get a set of business indicators today from the Bureau of Statistics which include inventories, wages and profits, tomorrow we get government finance data for the quarter and the balance of payments figures and analysis as well.
Others statistics out this week include building approvals for October (today), retail sales for the same month (tomorrow), and on Thursday trade for October, overseas arrivals and departures for the same month as well industrial disputes for September.
The market thinks there will be a 2% fall in building approvals after the 14% surge in September (caused by the sharp rise in approvals for units and flats). Retail sales are expected to show another small level of growth – which will be the sixth in a row and the trade data should show either a small deficit or perhaps a tiny surplus.
The performance of manufacturing survey for Australia is out later this morning, as well as house price indexes from RP Data – Rismark and Australian Property Monitors. The performance of services survey is out Thursday, along with private home building data and inflation.
And industry car sales data for November will be released late in the week.
In the corporate area, grocery distributor and retailer Metcash will release its interim results. It has already warned of a lower profit because of weak conditions.
The company is also conducting a head to tail review of itself (there’s new management on board) and some results from that study should be available with the profit announcement.
Dick Smith and Nine Entertainment list on the ASX on Wednesday and Friday respectively. They will test the new found optimism among investors for new issues.
Annual meetings are coming to an end – this week sees AGMs for TPG Telecom, Washington H Soul Pattinson, BT and Nufarm.
In Asia we get the final HSBC/Markit survey of Chinese manufacturing for November.
There was a small easing in the rate of expansion in the flash report last month, so the market will be looking for that level to be either confirmed, or perhaps increase in the report out later today.
Similar reports will be issued for other economies.
The HSBC/Markit China (and other Asian) services survey report is out on Wednesday.
In Japan data on capital spending and car sales will be released this week.
South Korea releases its third quarter economic data this week, as well as the trade figures for November.
In the US it’s the second estimate of third quarter GDP and the November jobs report, but manufacturing and service sector surveys will dominate.
And there’s also the Beige Book survey of the US economy prepared for the Fed meeting on December 17 – 18 that might just say something more definitive on the future of slowing the $US85 billion a month of quantitative easing.
The main focus will be on the employment and jobless reports due Friday night, our time, as it will likely be important in determining whether the Fed will start to taper at its December meeting.
US economists are going for 185,000 new jobs which may not be strong enough for the market, but if it’s 200,000 (as it was in October at 204,000) or above, the market will lift its expectations for an announcement from the Fed at its meeting this month on the future of the easing spending.
Unemployment is expected to fall back to 7.2% after the distortion caused by the shutdown in October. What would be bullish is if there is a discernible increase in the number of people looking for work and a rise in the participation rate.
As well there’s the monthly surveys of manufacturing tonight Monday and the services on Wednesday, new home sales (also on Wednesday) and the latest reading of September quarter GDP growth (on Thursday) to have been revised up to 3.1% from 2.8%.
And the early version of one of the two monthly surveys of US consumer confidence is due for release on Friday by Reuters and the University of Michigan.
There’s also trade data for October out midweek, factory orders, personal income and spending figures and consumer credit figures.
Car sales data for November is out tonight, our time.
The latest trade data for Brazil is also due for release.
Canada’s central bank releases its interest rate decision on Wednesday night, our time.
In Europe, the ECB meets Thursday night, our time, and won’t repeat October’s rate cut because inflation rose to 0.9% last month from October’s worryingly low reading of 0.7%, which lessened fears about disinflation or deflation. October’s unemployment eased to 12.1% from 12.2% the month before.
The ECB though may cut the interest it pays on bank reserves left with it to encourage banks to hold onto their money and lend more.
Credit rating upgrades for Spain and Cyprus by Standard & Poor’s on Friday, and an upgrading for Greece from Moody’s was also good news for the eurozone, but the Netherlands lost its AAA rating, which is a sign that a key core member of the zone is facing further pressures with falling house prices, weak growth and rising unemployment.
And there’s also third quarter eurozone GDP figures due for release for the eurozone as well as producer prices for last month and retail sales.
Unemployment figures are published in France, while industrial production numbers are released in Spain.
In the UK, the Bank of England meets Thursday night, our time, and is not expected to touch interest rates, even though the economy is definitely on the mend.
The UK Chancellor George Osborne meanwhile presents his Autumn Statement on the budget, borrowings and the outlook for the economy.
That should be a good contrast to the Bank of England’s statement and commentary on the economy.
What a week!
