Compared with the past couple of weeks, the coming week will be much quieter so far as important data and company announcements are concerned, while the results of the G20 meeting in Brisbane won’t have impact on markets or investor sentiment which is being driven more by falling commodity prices such as oil, and here in Australia iron ore, which hit a new five year low last week of $US75.40 a tonne.
The G20 commitment to add 2.1% to global growth over the next four to five years is pie in the sky stuff and meaningless for economies such as Australia where the biggest influence here is the health of the Chinese economy and other Asian economies.
To that end we will get another reminder of China’s importance on Thursday when the Markit and HSBC release their mid-month or ‘flash’ manufacturing indexes for China, European countries and the US.
These are expected to see more of the same with the US survey remaining strong and those for China, Europe and Japan lagging and showing sluggish levels of economic activity.
In Australia, the minutes from the RBA’s last meeting and a speech by Governor Glenn Stevens tomorrow will set the tone and will be watched by markets for clues on interest rates.
And on Friday the Reserve Bank’s Head of Economic Analysis Alex Heath delivers a speech at the NSW Mining Industry and Suppliers Conference in Sydney.
The message from the three events will reinforce the idea that the RBA has been pushing now for months – that it is waiting and watching and interest rates are on hold.
It is a message many in the markets and especially among the commentariat still find hard to understand.
Data for car sales from the Bureau of Statistics, the Westpac Leading index and the Federal Government’s Skilled Vacancies are also down to be released this week.
In the corporate area annual results for Orica on Wednesday and quarterly and half year figures for James Hardie are also expected the same day.
Programmed Maintenance Services releases its interim figures later in the week, along with Thorn Corporation with full year profit figures.
Annual meetings this week have a retail bent with shareholders in Wesfarmers, Myer, Specialty Fashion group and Kathmandu meeting here and in New Zealand. Other local companies meeting (and there are several hundred, mostly smaller miners and oil and gas groups) include BC Iron, Resmed, Goodman Fielder (probably its last), New Hope, Sonic Healthcare, Mirvac, Virgin Australia, Arrium, iiNet, Pattie’s Foods, LNG and Drillsearch,
In the US, the minutes from the Fed’s last meeting (Wednesday night, our time) will likely add little to the view that the first interest rate hike is unlikely until around mid-2015. What may be watched for though is any commentary around how the Fed is seeing the impact from softer global growth and the higher $US.
The AMP’s chief economist Dr Shane Oliver wrote at the weekend, “On the data front expect to see a modest gain in industrial production (tonight, our time), a rise in the home builders index (tomorrow night), gains in housing starts and permits (Wednesday night), a solid reading of around 56 for the Markit manufacturing conditions PMI (Thursday night) and a slight fall in inflation (also Thursday) to 1.6% due to lower gasoline prices”.
US earnings reports for the third quarter are close to ending, with figures from hardware giants, Home Depot and Lowes the biggest to be released.
Reports from other retailers such as Gap Inc, Dollar Tree, Williams Sonoma, Foot Lockyer, Staples and Best Buy are also down to be released during the week.
In Asia, Japanese September quarter GDP figures later today are likely to show a return to growth with GDP expected to rise 0.5%. This could be overshadowed by a snap election called by Prime Minister Abe on his return from the G20 meeting in Brisbane, and the postponement of the second lift in the country’s consumption tax.
The November PMI (Thursday) will be watched for further signs Japan’s recovery is continuing.
The Bank of Japan releases its latest interest decision on Wednesday – after the shock expansion of its huge spending at the end of last month, no move on rates (already at record lows) is expected.
And China’s HSBC flash PMI (Thursday) will be watched for further signs of stabilisation/improvement after the very mixed flow of data for October last week.
But the biggest data release in China occurs tomorrow with fuller details of house prices and investment figures to be made public.
Signs of a further slowing in activity are expected, especially after a sharp fall in bank lending in October.
In Europe a quiet week as well with trade data for October being released, as well as current account figures for September and construction data.
The European Central Bank’s Governing Council and General Council meet, but no interest rate announcement is scheduled.
Later this week, the OECD publishes a statistics release on third quarter GDP and also launches an updated economic outlook.
