This week sees the end of the quarter, half year and financial year for investors and hundreds of Australian companies – all Australian taxpayers, governments and the start of 2017-18 the day after.
Offshore its the end of the half year and the second quarter for thousands of companies – the new US reporting season is just 10 days or so away.
It is also the end of the second quarter for the Chinese economy with monthly and quarterly data two weeks or more away.
In Australia the last week of the month and financial year sees the usual flow of data – job vacancies data for May, new home sales to show a continuing gradual downtrend (both on Thursday) and credit growth data for May from the Reserve Bank on Friday – analysts will be looking to see if the crack down on interest only home lending and interest rate rates have hit demand for investor loans.
The most interesting data release comes tomorrow with the Bureau of Statistics revealing the latest data on the size of the Australian population and other details from the controversial 2016 census.
The AMP’s Chief Economist, Dr Shane Oliver says the census data “is expected to show the population having increased by another 1.5% through 2016 further fuelling underlying housing demand and helping support potential growth in the economy.”
In the corporate area watch for more downgrades, confirmation of the big UK deal and capital raising from Link, plus the Rio Tinto meeting in London tomorrow night (see separate stories for both).
Creditors to the Ten Network hold their first meeting in Sydney today with administrators Korda Mentha expected to provide an update on the company’s financial position.
Metcash will release its 2016-17 full year profit later today and investors will be focusing (wrongly) on how it is going to fight off Amazon (when Amazon is not the problem, Aldi is and a revitalised Woolworths).
And investors would do well to watch tonight’s Four Corners program on the ABC – it looks at retirement homes and could be a shocker for the a sector leader, Aveo Group (AOG code).
US data to be released in the week ahead will give an update on business investment, consumer confidence and the Fed’s preferred measure of inflation.
Dr Oliver says we can expect underlying capital goods orders tonight, our time “to show a further improvement” The end of month consumer confidence survey is out tomorrow night, along with house price figures for May.
Pending home sales figures are out on Wednesday, May consumer spending growth (on Friday) “to be a bit soft”.
Friday night also sees the release of the Fed’s favoured inflation measure, the core private consumption deflator which Dr Oliver says he expects ”to fall further to around 1.4%” which is well below the 2% target of the Fed. if that happens it will raise more debate on whether the Fed’s rate rises are over.
Dr Oliver says “the combination of which (consumer spending and core inflation) will probably keep the Fed on a tightening path but only gradually.
The US Federal Reserve will announce the results of the second part of its annual US bank stress test after the market close on Thursday morning, Sydney time. In the first round of this year’s stress tests, the Fed found that US banks have enough capital buffers to keep trading through an economic meltdown. The results have boosted hopes more US banks will be able to lift dividends and return surplus capital to shareholders.
And the third estimate of March quarter economic growth is out Thursday night and economists will be looking for another increase, as we saw in the second estimate a month ago which boosted the rate to 1.2% from the initial 0.7%.
Eurozone consumer and business confidence readings (on Thursday night, our time) but core eurozone and EU inflation on Friday night “is likely to remain weak and below target at around 1% year on year.” EU jobs growth will also continue in the June employment report.
In Asia, Japanese data to be released Friday “is expected to show continuing strength in labour market indicators (helped by a falling workforce), continued strong annual growth in industrial production and continuing weakness in inflation with core inflation remaining around zero,” according to Dr Oliver.
Chinese business conditions surveys for June (Friday) will also provide a look at how growth is holding. Expect the official manufacturing PMI to remain around 51, the private one might be a little weaker.
