Markets will continue to fret this week about Donald Trump becoming the 45th president of the United States, so investors will be nervy and trading volatile.
Trump has already revealed changes to his campaign promises on key areas such as muslims, migration, Obamacare and climate change to raise questions about what he is really thinking of doing. And others in his camp are talking about maintaining those policies.
Given his performance during the campaign, it wouldn’t surprise if he flip flops again and reverts to previous policy positions, and then changes his mind, again. Anything is possible and investors should expect the unexpected with this President.
In fact his policy pronouncements will dominate the headlines and much of the reporting, and will draw attention away from what is happening in the various economies.
So, taking Australia, it will pay to remember than the jobs data for October will be issued again this week and the accuracy of the data is likely to be as ropey as it was for September.
Wages and jobs will dominate this week. First up the wage price index (for the September quarter) will be issued on Wednesday and the AMP’s chief economist, Dr Shane Oliver believes there could be a rise of 0.6% from the June quarter, leaving annual growth at a record low of 2.1%.
Thursday sees the October jobs data released and Dr Oliver is upbeat, seeing a 30,000 bounce in employment after the big drop in full time work in September. He also sees unemployment rising to 5.7% (from 5.6%) as participation bounces back after recent falls.
The Minutes from the last RBA Board meeting are out tomorrow (the details were in the last monetary policy statement from the bank ten days ago). RBA Governor Phil Lowe makes the usual end of year set piece speech to the business economists annual dinner in Sydney tomorrow night.
He will indicate the central bank is on wait and hold for an indefinite period of time. In fact there won’t be another rate cut in Australia for sometime, unless the US or Chinese economies hit a big hole and slump sharply.
On the corporate front, the Rio Tinto board meets in London tonight, our time, to discuss the Guinea iron ore bribery claims that surfaced next week.
There was further news on Friday of former CEO’s Tom Albanese and his replacement, Sam Walsh, being in the loop on the $US10.5 million payment proposed to be made to an associate of the Guinea President.
Media reports say the future of Alan Davies, the senior Rio official suspended last week in connection with the bribery report, will be discussed at the meeting tonight.
A number of companies will hold their annual meetings this week – Brambles, Platinum Group, Pact Group, Automotive Holdings, Duet, Seven Group Holdings, Myer, Nine Entertainment, Resmed, Sonic Healthcare, Harvey Norman and Independence Group.
The biggie this week will be BHP Billiton in Brisbane on Thursday.
The will be a lot to talk about such as the commodity price surge, especially in iron ore, coal and copper – three of BHP’s major areas of interest, as well as an update on what is happening at the Samarco disaster site in Brazil and what is happing to the iron ore miner half owned with Vale.
Local companies releasing results include Elders, GrainCorp, James Hardie and Thorn Group
In China Chinese later today the October economic data drop is likely to show a slight rise in industrial production to 6.2% year on year (from 6.1%), but retail sales growth is expected to remain unchanged at 10.7% year on year and investment at 8.2% year on year, according to Dr Oliver.
Chinese house price data for October will be issued on Friday and economists will be looking for more signs of a slowing in the rate of price growth that was hinted at in September.
In the US, the consumer will be back in some focus with October retail sales data (tomorrow night) expected to show solid growth although election uncertainty may have acted as a bit of a drag.
Industrial production for last month is out Wednesday, and housing starts (Thursday) and consumer inflation as well.
The third quarter reporting season is just about over – this week it will be dominated by retailer such as L Brands, Target, Ralph Lauren, Gap and Abercrombie and Fitch, plus Lowes, Cisco and Staples. Offshore the likes of LG Group, ABN Amro, Vodafone, easyjet and Bouygues of France will report.
Federal Reserve chair Janet Yellen’s appears before the US Senate’s Joint Economic Committee on Thursday. She is not expected to confirm a move next month however she is expected to imply that recent events have not derailed the Fed’s plans.
And there will be comments from Bill Dudley president of the New York Fed, St. Louis Fed president James Bullard, Fed vice chair Stanley Fischer, Kansas City Fed president Esther George and other members of the monetary policy setting Federal Open Market Committee. In Japan, September quarter GDP growth is expected to come in around 0.2% quarter on quarter (unchanged from the June quarter).
In Europe, third quarter GDP results will be updated midweek. A preliminary estimate showed the region’s economy growing 0.3% in the three months to September.
