A big week for Australian confidence and market direction with the March jobs data on Thursday and a succession of data releases in China which could damage or bolster investor views about the health of the world’s second biggest economy and our largest export market.
Elsewhere US first quarter earnings step up with big Wall Street banks reporting, and other major groups, as well as a clutch of important data releases, while in Europe Greece’s financial pressures continue and the European Central Bank (ECB) holds its April meeting.
In China the major release is the March quarter GDP data (on Wednesday) which is likely to confirm a further slowing in economic growth to around 7% year-on-year (from 7.3% in the December quarter).
Meanwhile trade data later today will show a slowing in exports in March, and another weak month (and quarter) for imports (because of weak demand and price deflation).
March and March quarter industrial production, retail sales and fixed asset investment (all due Wednesday) will be weak.
And details of the slowing pace in house prices, and later in the week property investment are likely to confirm the real estate sector is dragging Chinese growth lower.
The Chinese data will influence not only markets in Australia, but globally as well as impacting the incredible stockmarket book that has gripped China and now spread to Hong Kong.
In Australia business and consumer confidence can be expected to have remained subdued according to the monthly NAB business survey on Tuesday and the Westpac/Melbourne Institute Consumer Sentiment survey on Wednesday and more details on housing starts for February (also Wednesday).
The jobs data for March on Thursday is to show a 10,000 gain in employment and unemployment remaining unchanged at 6.3% – not enough to make a meaningful dent in unemployment.
The quarterly report flow from the resources sector accelerates with Fortescue Metals due to release its update on Thursday.
Oil industry investors will have the latest from Woodside Petroleum from its AGM on Thursday, along with the latest on investment and exploration spending for this year. And Santos releases its first quarter production and exploration report on Friday and investors will be looking for evidence of falling spending by the company.
Other quarterly reports will be issued by companies including Iluka Resources and Whitehaven Coal.
The UK shareholders in Rio Tinto meet in London on Thursday night our time and will no doubt here why the company doesn’t want Glencore on board.
In the US, retail sales figures tomorrow night, our time, are expected to see a significant improvement after a soft few months.
Industrial production for March should show a slight fall, while housing starts for the same month will show big jumps as the weather improves from the cold winter.
Consumer price inflation on Friday night, our time, will show few pressures for March, while the Fed’s Beige Book of anecdotal evidence along with the latest manufacturing conditions surveys for the New York and Philadelphia regions will also be released.
US March quarter earnings results will start to flow in earnest this week and are likely to be a source of volatility for markets around the world.
Big banks led by JPMorgan Chase, Wells Fargo, Bank of America, Citigroup and Goldman Sachs report, with finance groups such as American Express, Charles Schwab and Blackrock joining in.
Oil services giant Schlumberger is due to report tomorrow night and will provide a guide as to how the oil price shock has hit the oil and gas sector.
Schlumberger is the biggest oil services group in the world and it has made an agreed bid for smaller rival Baker Hughes as its way of adjusting to the price slide, as well as cutting hundreds of jobs and billions of dollars in spending.
General Electric reports later in the week and there will be considerable interest after Friday’s shock decision to sell most of its financial services business, with around $US23 billion of property sold off last Friday.
Other companies to report include Netflix, the streaming video group, and computer chip giant Intel.
The AMP’s chief economist Dr Shane Oliver says, “consensus expectations for a 5.8% fall in profits over the year to the March quarter may prove to be a bit too pessimistic but there is little doubt that the rise in the value of the $US will have hurt earnings, with around 25% of US earnings sourced in foreign currencies”.
The biannual World Bank and International Monetary Fund spring meetings begin later this week. Finance ministers and central bankers will descend on Washington at the end of the week for the spring meetings of the World Bank and IMF. We can expect the struggles of emerging markets, the prospect of a Federal Reserve rate increase and Greece to be on the agenda. The meetings officially begin on Friday.
And the IMF will release its latest World Economic Outlook, and new, probably unchanged economic forecasts for many economies, and the biannual financial stability report for the global financial system.
In Europe, the ECB meets Wednesday night, our time, but no change to monetary policy is expected.
“Based on recent economic indicators ECB President Draghi is likely to express confidence that its expanded quantitative easing program is working,” According to Dr Oliver in his weekly note at the weekend.
