A top drawer week is ahead for economic and business related data in Australia and around the world.
Worldwide manufacturing and service surveys will be released, especially two from China, plus updates on the US labour market for September, as well as the vital unemployment numbers and inflation data for the euro area, plus the latest European Central Bank meeting.
The importance of the surveys of manufacturing and later in the week services (especially those from China) can’t be understated. Weak reports or surprise falls could hit market sentiment hard.
They could move markets, starting tomorrow with the release tomorrow of the final HSBC/Markit report on manufacturing in China. This month these surveys probably match the importance to markets that normally accrues to the US jobs report, which is out on Friday night, our time.
As well the release of end of month data in Japan will update us on what appears to be a slowing in growth and activity.
In Australia it’s the usual start of month data drop, with retail sales, building approvals and the trade data, all for August, out this week.
These lead to the Reserve Bank’s October board meeting a week tomorrow.
The RBA releases credit data tomorrow for August with the housing loans data to be closely watched.
A day after that release, the RP Data house price figures for September will be out and will be watched more closely than usual after the RBA raised the level of its concerns about the sector last week.
The AMP’s chief economist Dr Shane Oliver says, “We expect to see overall credit growth remaining modest but interest will be on whether growth in credit going to property investors accelerated from the roughly 10% annualised pace seen over the last few months”.
He says the RP Data figures are expected to show that house price gains remained strong in September, which will no doubt set off the usual chorus of doomsters and gloomsters.
Wednesday sees the retail sales out for August, and the next day the August trade deficit and building approvals will be released.
Dr Oliver says the trade deficit will rise, while building approvals will remain solid.
We will also get the private inflation survey from TD Securities, along with the manufacturing survey, and then the services sector survey – both for September.
As well, data on new home sales from the Housing Industry Association is also down to be released, while industry figures on car sales could be out late this week.
In the US, the main focus will be on jobs report on Friday night, and the manufacturing and services indexes (due Wednesday and Friday respectively).
The two so-called PMI surveys (Purchasing Managers’ Institute) are both expected to remain strong and confirm the US economy is the healthiest of all the major developed economies.
The employment data on Friday night is expected to show a 200,000 to 210,000 gain in payrolls for September and unemployment unchanged at 6.1%.
Consumer spending data (tonight, our time) is also expected to show that the Fed’s preferred inflation measure remained soft.
As well, monthly data on house prices, manufacturing activity in the Chicago area, and mortgages round out a big week for the US economy, investors and markets.
And then monthly industry figures for car sales for September are due for release from tomorrow.
In the Eurozone, business confidence data tonight, our time, is likely to have weakened a bit further and September inflation (Tuesday) is likely to be just 0.3% year on year.
Jobless data for last month and producer prices are also due for release.
Dr Oliver says that despite what is expected to a weak lot of data, especially on inflation, the ECB’s meeting Thursday night is unlikely to announce further monetary easing but may provide details of its proposed QE program involving asset backed securities.
In Asia, the surveys of manufacturing dominate, along with the usual end of month figures from Japan, plus the quarterly Tankan survey of big and medium business confidence and investment plans.
Japanese data for jobs, household spending, industrial production, labour cash earnings and housing starts are out tomorrow and will be watched for signs of further improvement following the impact of the April sales tax hike.
Inflation is continuing to fall in Japan since the peak in April and May (because of the sales tax rise).
Some analysts worry that Japan is now slowing, but others say there will be a pick up late in the year as predicted by the Bank of Japan.
Dr Oliver says the Bank of Japan’s September quarter Tankan business survey (Wednesday) is likely to have weakened slightly.
The areas to watch are in business investment intentions among small and medium business, which will tell us if the economy is still on an expansion track (that’s because business investment remains big part of economic growth in Japan).
In China, the official PMI (Wednesday) is likely to be little changed from the 51.1 reading for August, while no change is expected in the HSBC/Markit final report, from last week’s small rise in activity in the mid month ‘flash report’.
India’s central bank releases its latest interest rate decision tomorrow. No movement is tipped.
