From a horse race in Melbourne tomorrow, to the mid-term polls in the US, a central bank meeting here and offshore, and the key monthly jobs data in America and in Australia, it will be one of those enormous weeks for the Australian and world economies.
The combination of meetings, data, results and a host of other happenings outweighs last week and that crucial US Federal Reserve meeting and decision on QE.
In fact the shock expansion of Japan’s QE by that country’s central bank has overtaken the Fed’s move and stirred markets higher on Friday, with the Dow and S&P 500 hitting new highs, but not gold which plunged 5% in two days.
The echoes of that move will continue to reverberate across markets this week, adding to the volatility and raising the prospect of a major shakeout should some bad news suddenly emerge.
There are central bank meeting and data published by Australia, Europe (the ECB), the UK Japan, Iceland and we get the usual start of month reports on the health of the world economy’s major manufacturing sectors, from China, through Europe and the US.
We will have vital jobs reports from Australia, the US and Canada, another big week of third quarter results from the US, Europe and Japan and China, plus Westpac’s annual result here today. All in all a huge week.
In Australia the RBA meeting tomorrow (on Melbourne Cup day), won’t see a change in interest rates – in fact we will get more of the same from the country’s central bank, despite a campaign from Goldman Sachs and others for rate cut.
The Reserve Bank also releases its last Statement on Monetary policy report for the year on Friday and it will contain updates forecasts for economic growth and inflation.
In fact the Statement is likely to suggest that rates will remain on hold well into next year, while it will also be scrutinised for more details on possible macro-prudential measures to slow the property investment boom.
The major start of month economic figures for housing approvals, retail sales, trade and tourism will be issued by the Australian Bureau of Statistics, plus the rare release of the jobless data for last month this week.
It will be rare because the October figures will be released a week ahead of normal timing and analysts will be looking to see if the problems with the last couple of months data and the seasonal adjustment process has been resolved.
The jobs data, which will be the most important release this week here (after the post meeting statement from RBA Governor, Glenn Stevens) is expected to show unemployment around 6.1%.
The ANZ releases its monthly job ads survey for October later this morning as a precursor to the ABS data on Thursday.
Car sales figures are out midweek for October and there will be the monthly private inflation measure released, along with private measurers of house price movements, the start of month survey of manufacturing will be out later this morning, with the monthly report on the health of the services sector will be out later this week.
Westpac’s profit for the 2013-14 financial year is out this morning will be the best of the big four banks.
CSR releases its half year figures on Wednesday and US controlled home mortgage insurer, Genworth Australia releases its first figures as a listed company later this week as well.
News Corp releases its September quarter figures on Thursday morning, our time. 21st Century Fox, the main media group controlled by the Murdoch family, releases its first quarter figures tomorrow morning.
Annual meetings will include shareholder gatherings for Downer EDI. Fairfax Media, Boral and Brambles are also down to hold AGMs on Thursday.
In the US, after the noise from the Fed’s meeting last week and some solid corporate figures, the US will be dominated by the midterm Congressional elections (Tuesday night our time with results on Wednesday).
These polls will be watched keenly because the Republicans will likely increase their House majority and get a small minority in the Senate. Remember the debt ceiling again needs to be raised in early 2015 (the current debt ceiling extension runs out in March ps next year).
Fed chair Janet Yellen speaks on Thursday her speech will be watched for clues regarding the timing of interest rate hikes.
On the data front, expect more solid readings on the economy (now running at an annual 3.5%, according to last week’s first estimate for the September quarter) with the October manufacturing conditions survey (tonight, our time) to remain very solid, and a similar reading for the services sector survey results mid week.
But the October jobs data on Friday night our time will be dominant statistics releases this week around the world. It is expected to show a gain of 230,000 with unemployment remaining at 5.9%.
September quarter earnings will also continue to be released and the strength of last week is expected to be confirmed.
September quarter earnings for US companies continue to impress.
So far 363 S&P 500 companies have reported with 81% beating on earnings (compared to a norm of 63%) which look to be coming in around +10% year on year and 60% beating on sales where growth is running around 5% year on year.
The week will be dominated by big media companies, led by 21st Century Fox, News Corp, CBS, Time Inc, Time Warner, Liberty Media, Discovery, Tribune Media, Walt Disney, Scripps Networks and Cablevision.
As well September quarter reports will be releases by Loews, Whole Foods, First Solar, Motorola, Trip Adviser, computer chip group, Qualcomm, health group, Humana, oil group, Apache Corp, Warren Buffet’s Berkshire Hathaway, Priceline and Monster.
Outside of the US, some of the biggest companies in Europe and Asia will report, starting with BMW, Arcelor Mittal (the world’s biggest steel maker), Toyota, Molson Coors, Singapore Airlines, Zurich Insurance, Swiss Re, Munich re, Melco Crown, Addidas, Siemens, Marubeni, Mitsui and Co, Suntory, Hugo Boss, Adecco, the world’s biggest labour hire group, NTT of Japan, Asia, biggest commodities trader, Noble Group, Heidelbergercement and Lenovo, China’s rapidly growing technology group.
In Europe, Thursday’s meeting of the ECB dominates as deflation fears continue to dominate, even though October consumer inflation edged up to 0.4% from 0.3% in September (but german inflation fell to 0.7%, down 0.3% from the previous month.
In the UK, the Bank of England announces its latest monetary policy decision for the UK on Thursday as well.
The surveys of manufacturing later today will be watched to see if there are any signs of an improvement, especially in Germany where exports to Russia have collapsed, retail sales have slowed sharply, but employment rose in October.
Industrial production numbers for Germany and the UK for September are due for release as well.
In Paris the OECD publishes a statistics release on consumer prices in its 34 member countries, while later in the week it releases updated economic forecasts.
Retail sales and producer price figures for the eurozone will be issued during the week.
In Asia the release of surveys of manufacturing (China today) from HSBC/Markit kicks off the week.
The official survey of manufacturing, released on Saturday showed a slight slowing, but the reading remains above 50, which separates expansion from contraction.
Chinese trade data for October will be released on Saturday. Will exports continue to surprise, or will imports fall, again?
The survey of Japanese manufacturing will be awaited for signs that the economy is regaining momentum after GDP dropped 1.7% in the second quarter.
Industrial production data suggests its sluggish.
Obviously the economy, especially retail spending and inflation, remains a concern given the Bank of Japan’s dramatic expansion of its Quantitative Easing on Friday afternoon.
Inflation, which slowed to an annual 1%, from 1.5% earlier in the year (excluding the impact of April 1 as tax rise) is the big concern as it shows that disinflation is returning to Japan, with the prospect of a lurch lower into deflation again.
The Bank of Japan move sent the yen down to a six year low against the greenback and saw the Nikkei jump close to 5% on Friday alone.
The Bank of Japan releases the minutes of its October meeting late in the week. Given the surprise announcement on Friday, it will be interesting reading.
