Tomorrow’s Federal budget dominates the coming week.
But the publicity around the budget will bury a couple of major releases of important economic data from Australia and China, as well as the third quarter update from the Commonwealth Bank.
Elsewhere yesterday’s illegal vote in the Eastern Ukraine will boost tensions with Russia.
Here in Australia, the March housing finance data and the home price index for the major capital cities for the March quarter will both be overshadowed by Joe Hockey’s first budget as Federal Treasurer.
Falling iron ore prices (see separate story) will rattle the stockmarket here today, but the budget is the big news, with much of it having been leaked in recent days to soften us up.
The NAB publishes its monthly survey of business conditions and confidence later today and on Wednesday the Westpac/Melbourne Institute survey of consumer confidence will be released.
Both could show some impact from the pre-budget talk about tax levies and spending cuts.
The release of both surveys in a month’s time will tell us more about the public’s reception of the budget.
Treasurer Joe Hockey is at the National Press Club on Wednesday to sell his first budget and Opposition Leader Bill Shorten makes his reply on Thursday night.
The housing finance data will tell us if home lending took a fall in March after building approvals dipped, as did price growth.
The solid rebound in home construction and finance is the one of a couple of factors that is keeping the economy from tanking and helping slow the rise in unemployment. The export sector (especially iron ore) is the other factor.
New car sales and lending finance data from the Australian Bureau of Statistics will also be issued this week – car sales will be lower.
There are a couple of speeches from a senior Reserve Bank official – the bank’s head of financial stability Luci Ellis speaks in Sydney tomorrow (she’s a panelist at a finance conference) and on Friday speaks at a housing conference.
She is a keen observer of the housing rebound, especially the prices for existing houses in Sydney and Melbourne.
Across the Tasman, New Zealand releases its 2014-15 budget this week as well. That will happen on Thursday.
In the corporate area, it’s a fairly active week.
The third quarter trading update from the CBA is out first thing Wednesday morning and will have to compete with the post budget publicity and argy bargy.
If the interim results of the ANZ and Westpac are any guide, the CBA will have some good news on profits.
Later today Incitec Pivot will release its first-half results, tomorrow its Orica with its interim figures.
On Thursday, GrainCorp releases its interim figures. It has already provided a downgrade in February.
On Thursday we have annual results from CSR, SP Austnet and Singapore Telecom (Optus).
Coca Cola Amatil’s AGM tomorrow will also be overshadowed by the budget as well. The company announced the start of its re-organisation on Monday morning, a day ahead of the AGM. Coke shares are down around a third this year after a shock earnings downgrade earlier this year.
We can expect to hear more from new CEO Alison Watkins about the earnings downgrade and the review of the company. She will no doubt talk about the company’s first quarter trading update and guidance for the June half year. It may not be good news, again.
The company announced the start of its re-organisation on Monday morning, a day ahead of the AGM.
Other AGMs this week will include Santos, Sydney Airport and Oil Search.
In Asia, Japanese first quarter GDP numbers on Thursday will show a boost to growth from the higher spending by business and consumers in February and March ahead of the consumption tax rise on April 1.
That means there could very well be a slide into the red this quarter as consumers and business stop spending.
Industrial production data for April is due out on Friday and could provide the first real assessment of the slowdown in activity after the tax rise.
China completes its April economic data releases tomorrow with figures on industrial production, urban investment and retail sales.
The results of the Indian election are due to be announced on Friday. There will be a new government and Prime Minister.
Industrial production figures for India are also due for release.
In the US, Fed chair Janet Yellen speaks on Friday. She spoke to the US Congress twice last week and this week’s comments are not expected to move markets.
Major US statistics out this week include retail sales (with a rebound expected), consumer and producer price inflation data, business inventories, import prices, a manufacturing survey for the Northeast US, weekly mortgages application figures (another fall is tipped), industrial production figures and housing starts and permits for April.
Details of the latest US budget will be released tonight, our time.
Besides the retail sales data, quarterly results from leading retailers will dominate the first quarter reporters this week, led by Walmart.
As well, the struggling JC Penny department store chain will update the market, along with rival department store giant, Macy’s.
Two other department store chains in Nordstrom’s and Kohl’s also report and these and other reports from smaller chains will give us a good idea of how the important US retailing sector is going.
Walmart will be watched closely to see if its weak US domestic sales have improved.
Tech equipment giant Cisco reports this week and that could see the tech sector continue under pressure.
The world’s largest farm equipment maker Deere is also down to report, as will computer chip maker Applied Materials. Drug giant McKesson is due to report its forth quarter figures tonight.
In Canada Turquoise Hill Resources, which owns the Oyu Tolgoi copper and gold mine in Mongolia, reports earnings for the first quarter.
Turquoise Hill is 51% owned by Rio Tinto, and owns 66% of the Oyu Tolgoi mine, with the rest owned by the Mongolian government.
Rio and the government have been at loggerheads about the financing of the huge underground second stage of the mine.
Rio and Turquoise Hill have missed a succession of deadlines to the $US5 billion financing of the expansion.
In Europe, the eurozone will release first quarter GDP estimates this week which will tell us how the European recovery is going. Industrial production data is out midweek.
Inflation data for the eurozone as a whole will be out this week and will confirm the continuing slow easing in the rate of price growth, (which is called disinflation).
Inflation and growth forecasts for the UK will also be issued by the Bank of England midweek.
Trade data will be released for the eurozone as a whole on Friday.
GDP and export figures for Russia are due for release late in the week and are likely confirm that the economy is close to dipping into the red, if it hasn’t done so already with higher interest rates and a huge capital outflow hurting demand.
That’s all due to the Ukraine aggression by President Putin.
The tension has deepened with the illegal vote in the east of the Ukraine yesterday. France and Germany also threatened to stiffen and extend the range of sanctions against Russia.
