It’s a big, big week here and around the world for central banks profits and markets, while in Australia its inflation and interest rates that will dominate.
On Wednesday we can expect another low consumer inflation reading for the June quarter which could clear the way for a Reserve Bank rate cut the following Tuesday.
The AMP’s chief economist, Dr Shane Oliver sees headline inflation rising 0.4% quarter on quarter because of higher petrol and the seasonal rise in health costs.
But because of the fall of 0.2% in the March quarter and the rebasing of the comparison, this will see the annual rate dip to 1.1%, from 1.4%in the March quarter.
Underlying inflation (by the RBA’s favoured measures) could rise by 0.4% quarter on quarter, or 1.4% annually, down from 1.6% in the March quarter.
Export, import and producer price inflation data will also be released.
And June credit data (on Friday) will show that credit growth remains moderate with lending to property investors continuing to slow, but business lending remaining solid.
All this will show an economy doing well, but facing a continuing low inflationary environment.
The question for local markets will be – is that going to be enough to see a rate cut on Tuesday week from the RBA?
The Australian reporting season steps up – Australian Foundation Investment Co reports its full year figures later today, Resmed on Thursday, along with GUD Holdings. The flow of quarterly reports slows this week with the most notable coming from Fortescue Metals Group.
In the US, the Fed is expected to leave rates on hold after its two day meeting which ends Thursday morning, our time.
On the data front in the US expect US home prices, new home sales and consumer confidence (all Tuesday night, our time).
And then durable goods orders and pending home sales (out Wednesday night, our time), the June quarter employment cost and personal expenditure index and the first second quarter GDP growth estimate will both be released on Friday night, our time.
The GDP estimate should show growth rising to an annual rate of 2.6%, from 1.1% in the first quarter.
The second quarter reporting season steps up with 194 S&P 500 companies releasing results, and hundreds of other, smaller companies as well.
Big tech companies – from Facebook, Apple and Amazon (plus Alphabet) will release earnings reports, while Boeing and Airbus release their figures, along with a clutch of European banks.
Germany’s ailing giant, Deutsche Bank will be the bank result in Europe to be watched closely, especially in the light of the eurozone bank stress results out on Friday night, our time.
Big oil companies report – starting with the two giant of the US sector – ExxonMobil and Chevron and several from Europe, including Total from France and Repsol from Spain.
In the Eurozone, the focus will be on those European Central Bank stress tests of the eurozone’s biggest and most important bans. That’s out on Friday night, our time.
Friday night also sees the eurozone’s June quarter GDP estimate, with one from the UK as well. Both will be out of date thanks to the Brexit vote on June 23.
Markets are not interested in the past now, they are still fretting about the future, especially for the UK economy which is showing signs of sliding.
Japanese data due out Friday is expected to show continued labour market strength and a bounce in industrial production but soft household spending and inflation.
Those figures will be available for the Bank of Japan at its monthly meeting on Friday which many in the markets believe will see another easing in its already expansive monetary policy.
