Australian jobs, Chinese trade and inflation, inflation also in the US and several other countries such as Britain and Canada, Reserve Bank board minutes and the local December 31 reporting season – it will be a busy week for investors here and offshore – and that’s before further action on those markets, starting with what could be a solid rise today in Asia.
US markets will be closed tonight for the Presidents holiday, but there will still be electronic trading in bonds, currencies and commodities.
In China, the January trade data later today will dominate the start of the week, and perhaps longer. It is expected to show some improvement in import growth because of higher import volumes ahead of last week’s holidays, but export growth is forecast to have remained weak.
Thursday’s consumer price and producer price inflation figures will again show very little change – except perhaps for the usual rise in food prices in the Chinese winter.
But trading in Chinese markets later today and tomorrow will hold a lot of attention as well – will Chinese investors fret and sell off shares in catch up mode to last week’s fall, or buy in the wake of Friday’s bounce in Europe and the US?
In Australia, the minutes from the last RBA Board meeting (tomorrow) will be watched for more clues as to how concerned the RBA is about the turmoil being seen in financial markets as a guide to how strong its easing bias is.
While the minutes are likely to continue to reiterate a reasonable degree of confidence about Australian conditions, they won’t be any different to what was in the first statement of monetary policy for the year, 10 days ago, or what Governor Glenn Stevens told the House of Reps economics committee on Friday.
But the major release will be Thursday’s jobs figures for January – the first substantial official data for 2016.
The markets are looking for a gain of 10,000 to 15,000 jobs, but after the reports for November and December were much stronger than expected, there’s a degree of nervousness about what will be in Thursday’s release from the Bureau of Statistics.
The AMP’s chief economist Dr Shane Oliver says, "the jobs data on Thursday will be looked at to see whether recent unbelievable strength has continued into January. Given that the recent samples rotating into the jobs survey have had higher levels of employment than those moving out (of the workforce) the odds are that it has. So we expect a 10,000 gain in jobs and unemployment to remain at 5.8%.”
And Comsec economists say they "expect that 15,000 jobs were created in January with the jobless rate largely unchanged near 5.8 per cent. The Reserve Bank believes unemployment could trend lower in coming months, a forecast backed up by the latest data on job ads".
There are some minor statistics out this week – lending finance figures and car sales for January from the Bureau of Statistics and also on Thursday Reserve Bank Assistant Governor Malcolm Edey delivers a speech in Sydney.
And the Australian December half profit reporting season steps up this week with more than 70 major ASX 200 companies due to release interim or full year results.
Companies reporting include CSL, Woodside, Lend Lease, AMP, GPT, and Telstra. The NAB and ANZ are due to issue first quarter trading updates, while the Bendigo and Adelaide Bank releases its half year result. Media groups such as Fairfax and Seven West Media are due to release figures as well.
In the US, the minutes from the Fed’s last meeting (Wednesday night, our time) will be dated given recent market movements and comments by last week by chair Janet Yellen and other Fed officials.
On the data front, expect the home builders conditions index (Tuesday night, our time), housing starts (Wednesday night, our time) and December, industrial production and January Consumer Price Inflation data , headline inflation (Friday night, our time. The latter is expected to be dragged under zero by weaker petrol prices.
The US December quarter earnings continues this week, with retailers such as Priceline.com and the mighty Wal-Mart (America’s biggest retailer) reporting their latest quarterly figures, along with the large department store chain Nordstrom.
Japanese GDP data for the December quarter is out this week and is likely to show an 0.2% quarter on quarter contraction driven by consumer spending and business investment.
That will underline why the Bank of Japan went to a negative interest rates policy on January 29, and unsettling world financial markets in the process.
