Australia continues to reawaken after the Christmas New Year break and top of the list this week will be one of the top tier economic reports – the Consumer Price Inflation data for the December quarter and 2016 as a whole.
It’s out Wednesday, the day before the Australia Day holiday on Thursday which many people are turning into a very long weekend by scheduling a day’s holiday on Friday.
The CPI is expected to see a step up in the quarterly and annual rate of price growth.
The AMP’s chief economist, Dr Shane Oliver says “We expect the CPI to rise 0.6% quarter on quarter as higher prices for petrol and a tobacco excise increase offset seasonal softness in prices for utilities, health and education."
"This will push the annual inflation rate up to 1.5% from 1.3%yoy in the September quarter and a low of 1.1%yoy in the June quarter. Underlying inflation is expected to remain low at 0.5%qoq or 1.5%yoy.”
The report will have no impact on the Reserve Bank – inflation remains well below the central bank’s 2-3% target. “And if as we expect the RBA revises down its growth and inflation forecasts at its February meeting it may contribute to another rate cut,” according to Dr Oliver.
“This could come as early as February but we suspect a cut around May is more likely as the RBA is likely to prefer to wait to get more clarity on how the economy is performing," Dr Oliver wrote at the weekend.
Australian Foundation Investment Co, (AFIC) releases its interim profit and dividend details later today. On Wednesday, smaller listed investment company, Milton Corporation, releases its interim figures.
And on Wednesday BHP Billiton produces its December quarter and half year production figures.
In the US, the focus will likely be on Donald Trump’s initial actions as President – we saw some early moves at the weekend.
On the data front, the first estimate of December quarter GDP growth (Friday) is likely to have been around 2.1% annualised, down from the 3.5% pace seen in the September quarter but still solid.
In other data, expect the January manufacturing conditions PMI (Tuesday) to remain solid, solid readings for existing and new home sales (Tuesday and Thursday respectively), a rise in home prices (Wednesday) and a continuing improving trend in underlying durable goods orders (Friday).
US December quarter earnings reports will continue to flow and are expected to show profits up by around 4.3% year on year.
Companies from tech (Intel, Texas Instruments, Alphabet, Yahoo, Microsoft and Qualcomm) to airlines (American and Southwest), manufacturing, (Caterpillar, 3M, Dow Chemical, Du Point, Honeywell), defence (Boeing, Lockheed, Grumman), pharma (Johnson and Johnson, Abbott Labs, Bristol Myers), telcos (Verizon and AT&) and media (Comcast), retailing/food (Starbucks, McDonald’s) cars, (Fiat Chrysler and Ford), oil services (Baker Hughes, Halliburton), energy (Chevron) and airlines (Southwestern and American).
And offshore giants like UBS, Hyundai and Kia Motors, Diageo Plc, Posco and Banco Santander.
Eurozone business conditions PMIs for January (Tuesday) are also likely to have remained solid. The first estimate of 4th quarter GDP for the uK will be out on Thursday and will show the growing impact of the Brexit debate.
Japan’s manufacturing conditions PMI (tomorrow) will be watched for a continuation of the recent improving trend and inflation data for December and 2016 will be released Friday.
