Central banks and the mid-month updates on the health of manufacturing in a number of major economies, especially China, will dominate the coming week.
Rather than new meetings and decisions, attention will be held by the minutes of the recent monetary policy meetings of the Reserve Bank of Australia, the US Federal Reserve and the Bank of England.
As well, the Bank of Japan meets and releases its latest monetary policy statement midweek.
All statements will be examined for clues on whether the banks are thinking of changing their current policy stances, apart from the Fed which we know is slowly ending its third round of quantitative easing.
Among the usual monthly round of ‘flash’ or early reports on the health of manufacturing for economies in Asia, the US and Europe, the early update on China will be of major interest for us in Australia, given the continuing slide in iron ore prices (see separate story) and the mixed economic data for April.
Here in Australia, tomorrow’s minutes from the RBA’s last Board meeting will again confirm that the central bank sees rates remaining on hold for some time yet.
And Reserve Bank assistant governor, Guy Debelle speaks in Adelaide tomorrow at a finance conference and his speech will be examined for any clues.
Meanwhile, the Westpac/Melbourne Institute monthly survey of consumer sentiment data will be out on Wednesday, and not last week.
It was delayed to allow the impact of the Federal Budget to be assessed.
On Wednesday The Opposition’s treasury spokesman, Chris Bowen speaks at the National Press Club and Mr Hockey is on the ABC TV program, Q&A tonight at 9.30 pm.
The March quarter wages price index data will be released on Wednesday as well.
That is likely to show that wages growth remains very weak at an annual pace of around 2.5%, which will provide further comfort to the RBA that inflation will remain contained.
In fact wages growth is at its lowest level in nearly 25 years.
In the corporate area, the Leighton Holdings board meeting today will see big changes to the board and the company discussed, now that the Spanish company, ACS has effective control through its subsidiary, Hochtief.
Boart Longyear shareholders also meet today.
That will be far more depressing than Leighton’s AGM. Boart’s board will hopefully provide an update on new financing options it has been promising.
Earnings results from James Hardie and Dulux are scheduled this week. Dulux reports its interim figures later today.
Arrium will release its third-quarter production report on Wednesday and on Thursday, James Hardie will release its full-year results.
In the US, Wednesday, US time, sees the Fed’s latest minutes released, while chair, Janet Yellen is due to speak in New York.
The AMP’s Dr Shane Oliver says that on the US data front, we can expect the Markit manufacturing conditions PMI (Thursday, US time) to have remained around the solid 55 level and April data for both existing home sales (also Thursday) and new home sales (on Friday) are likely to show bounces.
There are a few US first quarter figures out this week – mostly from retailers and the odd tech stock.
Last week’s reports from retailers were mixed – with luxury department store chain, Nordstrom reporting strong rises in sales in many sectors, while the struggling JC Penny also saw a big sales rebound from the weak levels in late 2013.
But Walmart reported very weak figures, in fact its weakest sales growth for five years.
Tech giant (especially in personal computers), Hewlett Packard, reports its latest quarter results as well this week.
As well this week Target, America’s number 2 retailer reports and the figures won’t be pretty after the huge customer data hack late in 2013.
It has cost the company billions in lost sales, costs to fix the problem and pay for the customers data to be replaced, and in payments to banks for compensation.
The company’s CEO departed earlier this month as the fallout from the debacle continues.
Other retailers to report include Lowes Cos (Woolies partner in the Masters chain), Home Depot, Dollar Tree (a discount chain), Gap and Staples.
Eurozone business conditions surveys, out Thursday night, our time are likely to remain around the 53-54 level consistent with continued economic recovery.
But it won’t be uniform, as last week’s GDP data for the first quarter showed with stronger than expected growth in Germany and no growth in Italy, France and Holland.
European companies reporting include luxury fashionwear group, Burberry and global brewer, SABMIller (which owns Fosters), plus Vodafone.
And voting in the European Parliament takes place this week from May 22, with the results to be known next Sunday, May 25.
In Asia, The Bank of Japan meets on Wednesday but is likely to remain on hold, awaiting more details on the impact of April 1’s sales tax hike.
Car sales are down and we know that some early reports suggested weak sales in some retail sectors.
Markets will be looking to the bank for some guidance about the sagging strength of the economy despite the strong first quarter GDP figures, which were boosted by pull forward purchases by business and consumers ahead of the last week’s first estimate of March quarter growth and expectations of negative growth for the current quarter.
And China’s flash HSBC manufacturing survey results are also out on Thursday, our time and Dr Oliver says they are expected to remain soft at around 48.
Chinese computer group, Lenovo reports its earnings this week.
