Another test for market confidence later today with the start of the flow of important data on the Chinese economy for the month of September and the quarter.
For Australia, the data from China this week and next (which is the big week with the quarterly GDP figures to be released) will dominate domestic news.
The trade data for September (a record surplus of $US60 billion is being forecast by some commentators) is out at lunchtime in Asia, while details of new yuan loans for last month will also be released.
Given the rising level of fear among investors, a surprise on the downside in the Chinese data could see markets sell off. Investor confidence levels are not high and they are likely to take fright at even the smallest bit of bad news, especially about China which remains the major external economic influence on Australia.
The Chinese trade surplus for August was $US49 billion and much higher than expected.
Analysts expect another monthly of weak to declining imports in September because of falling commodity prices (for oil, copper, iron ore etc) and a small rise in exports.
The September figures for Chinese consumer and producer prices are both out on Wednesday. In fact it’s likely inflation for September will have fallen to just 1.7% year on year with producer prices again falling sharply.
That will lift fears of deflation and intensify calls for more monetary easing. The AMP’s chief economist, Dr Shane Oliver says the loans and money supply data is likely to show a modest improvement after recent weakness.
In the US, the main focus will be the weakening state of the markets and investor confidence. Also attracting attention will be the usual monthly data flow, and a speech on Friday night, our time, by Fed Chair Janet Yellen.
Markets will be looking for anything new on the monetary policy outlook but she is likely to simply confirm that the timing of interest rate hikes remains dependent on the state of the economy and right now there remains significant slack in the labour market.
On the data front: September retail sales (Wednesday night our time) could be weak after the strong gains seen in August; benign producer price inflation (also on Wednesday); solid growth in industrial production (Thursday, our time) and continued strong readings in the New York and Philadelphia Fed manufacturing conditions surveys (due Wednesday and Thursday respectively); and a rebound in housing starts and permits (Friday night, our time). The Fed’s Beige Book for the Fed meeting at the end of the month will also be released midweek.
US third quarter earnings accelerate this week with major banks and tech stocks reporting, plus industrial giants, GE and Honeywell and Textron.
Citigroup, Goldman Sachs, Wells Fargo, JPMorgan, Morgan Stanley, Amex, Blackrock and Bank of America leading the financial groups reporting in what should be better figures for the trading operations, but not for mortgage lending.
Among the tech stocks we will see Google, AMD, Intel and Netflix report. Slumberger the huge oil services group is also down to report and will give us a glimpse of the damage the slide in oil prices is doing to demand in the sector. Medi giant, Johnson and Johnson also reports.
In Australia, the monthly report on business conditions and confidence tomorrow from the NAB will be watched to see if business conditions and confidence have remained around the reasonable levels seen in August and the Westpac consumer confidence survey (on Wednesday) will be watched for a bounce after the weakness seen in September.
June quarter data for dwelling starts ((Wednesday) are likely to show further strength. Other figures this week of note are lending finance details for August and car sales for September.
The Network Ten 2013-14 results (for the year ending August) will be announced on Thursday.
Annual meetings this week include Telstra and Cochlear tomorrow, Dick Smith, CSL and The Reject Shop shareholder meetings on Wednesday, and Crown and Ansell on Thursday
Quarterly production reports start flowing in greater numbers, the highlight being the third quarter releases from Rio Tinto on Wednesday, Fortescue and Woodside the day after and Santos on Friday. OZ Minerals released its September quarter report on Tuesday.
Reserve Bank of Australia assistant governor (financial markets) Guy Debelle has two public outings this week, highlighted by a speech tomorrow at an investment conference. He’s then on a conference panel on Thursday.
In Europe industrial production numbers and inflation figures are released in the eurozone. A fall in factory output in August is expected in the data release tomorrow night after production increased 1% in July.
Data for Germany last week revealed a nasty fall in industrial output in August at the sharpest rate since the financial crisis. Exports and orders for German industry are also falling faster than forecast, adding to recession worries in the eurozone’s largest economy.
Inflation numbers are published in Spain, Italy, the UK and France tomorrow night our time, Germany on Wednesday night, while on Thursday night, trade balance data and inflation numbers are highlights for the entire eurozone economies.
In Japan, industrial production data for August are released on Thursday.
