In Australia attention will be on the economy and on the December reporting season which peaks this week with more than 100 top companies releasing figures, led by the likes of BHP Billiton (Tuesday), Woolworths (Wednesday) and Qantas (Thursday).
Globally the Flash results from surveys of manufacturing and services will be out this week and will give us will early indications on the health of a number of key economies midway through the first quarter.
On the economy this week we move into the lead up to the release of the 4th quarter national accounts and GDP figures on March 1 (Wednesday week).
Tomorrow sees the release of the minutes from the last RBA Board meeting which will confirm the RBA’s new optimism about the economy’s outlook. On Wednesday RBA Governor Lowe has his second speech of the month, while on Friday he appears before the House of Representatives Economics Committee for the first time this year.
He will underline the RBA’s new outlook and the RBA is comfortably on hold for the time being.
There are three major data releases this week – all with input into the GDP figures.
The Wage Price Index for the December quarter is out on Wednesday and is expected to show a small rise in some areas, but overall, it will remain weak at an annual rate of 1.9% according to an estimate from the AMP’s Dr Shane Oliver.
He sees the December quarter’s construction data (also Wednesday) reporting a 1% quarter on quarter rise after bad weather and a few other things affected the September quarter. Mining construction will still be be falling, but that is almost over.
On Thursday the December quarter business investment figures to also show a 1% quarter on quarter gain according to Dr Oliver. Watch for the latest (the 5th) estimates of investment for 2016-17 and the first estimate for 2017-18 which will be watched very closely to see if business is now confident enough to step up investing outside the mining industry.
“Of most interest in the capex data will be investment intentions for this financial year and next which are expected to foreshadow some improvement in non-mining investment, and the wage data to see if there was any pick up in wage costs from the surge in income and our terms of trade in the quarter,” Dr Oliver wrote at the weekend.
The Australian December half profit reporting season will hit is biggest week with nearly 100 major companies reporting, including BHP, Worley Parsons, IAG, Woolworths, Qantas, Woodside, Iluka, OZ Minerals, The Reject Shop, Bega Cheese, Blackmores, Brambles, Kogan, Beacon Lighting, Super Retail and more.
In the US, in the week ahead the mid month flash business conditions surveys for February (tomorrow night) are forecast to remain strong with solid growth. There should be a bounce back in existing home sales (Wednesday night) and new home sales (Friday night) and continued strength in house prices (Thursday night).
The US markets are closed tonight our time for the Presidents’ Day public holiday.
The minutes from the Fed’s last meeting (on Wednesday) will be read closely for further confirmation the Fed is on track to continue gradually raising interest rates.
The US 4th quarter reporting season is ending. Retailers lead the way this week with Wal-Mart, Macy’s Dillards’s, Kohl’s, TJ Maxx Cos and Home Depot reporting.
But all eyes will be on the 4th quarter and 2016 figures from Warren Buffett’s Berkshire Hathaway at the end of the week, topped off by his annual shareholder letter.
In Europe, the Eurozone, business conditions surveys for February (Tuesday night) are also expected to remain strong.
Euro area inflation figures will ignite debate on future monetary policy by the ECB, while second estimates on UK and German GDP will be assessed for signs of any growth slowdowns.
In Asia, Japan’s manufacturing conditions PMI (tomorrow) is likely to show a further improvement.
And Chinese property price data for January (Wednesday) is expected to show some further slowing in growth as property cooling measures continue to bite.
