A quiet week ahead for markets as they continue to assess the impact of the Fed’s rate rise and the increasing instability of the Trump administration.
The US dollar sold off late in the week after the Fed decision and that helped markets end on a mostly solid note – especially many commodities such as gold, oil and copper.
The coming week will see the mid year ‘flash’ reports from Markit on the health of manufacturing and services sector in countries such as Japan, Europe, the UK, US and some emerging markets.
The updates are likely to contain good news and further underline the steady recovery of the global economy, despite the increasingly odd policy ideas and fights the Trump administration now finds itself in.
In Australia, the minutes from the last RBA Board meeting tomorrow will confirm the RBA is comfortably on hold.
But most interest will be around comments in relation to lending standards, while speeches by the RBA’s Economics head, Assistant governor, Luci Ellis and Deputy Governor, Guy Debelle will be watched for any clues regarding rates and new macro prudential requirements on home lenders.
The RBA is shaping up for some tough commentary on the house price boom – especially apartments – the first Financial Stability review to be released the day before Easter starts on April 13.
This week also sees the December quarter house price index released and the Bureau of Statistics is expected to confirm a 2% gain in December quarter home prices (also out tomorrow).
This week also sees a handful of January ending companies reporting their latest results – these will include NZ outdoor clothing chain, Kathmandu (Tuesday), plus the linked companies, New Hope, TPG Telecom (both Tuesday), Washington H Soul Pattinson and Brickworks (Thursday).
Sigma Pharmaceuticals and Nufarm are also down to report, as is global dairy giant, Fonterra (all Wednesday).
Major building group, Fletcher Building will release a profit downgrade this morning after going into a trading halt on Friday (see separate story).
Thursday morning we get the Reserve Bank of NZ’s interest rate decision – no change is expected in the rate which is 1.75%.
In the US, a speech by Fed Chair Yellen (on Thursday night, our time) will be watched for any more guidance regarding the outlook for monetary policy.
Several other fed heavies speak in the US during the week so, the outlook for US rate rises should be fairly well discussed by the close on Friday.
These include Chicago Fed president Charles Evans, Dallas Fed president Robert Kaplan and Minneapolis Fed president Neel Kashkari — the only member to dissent at last week’s open markets committee meeting. The head of the New York Fed is due to speak at another function
On the data front expect to see continued gains in home prices (Wednesday) but a fall back in existing home sales (also Wednesday) and new home sales (Thursday) after strong gains in January, February durable goods orders to show ongoing improvement and the March manufacturing conditions PMI (all Friday) to remain strong.
There are several leading companies reporting – FedEx, General Mills and Accenture in the US, retailer Next in the UK and a flock of companies from China.
Eurozone business conditions surveys for March will be released on Friday are also likely to remain at strong levels, while similar surveys will be out in the UK, while Bank of England Governor, Mark Carney is due to speak later in the week.
