It will be an active week for investors here and around the world – above and beyond febrile markets.
In Australia, the big news this week (apart from three major bank profits and the health of the markets), will be the Consumer Price Index for the September quarter to be released on Wednesday.
In the US it’s the October jobs report on Friday with data on the jobless rate, the number of new jobs and wage costs; watch for Apple’s quarterly earnings report on Friday morning, Australian time, it will influence the market one way or another.
In Japan, the country’s central bank meets midweek.
In Europe, the last UK budget ahead of Brexit next March will be handed down tonight, our time October employment and inflation data will be out for the EU, along with the first estimate of third quarter EU GDP.
There is also the usual start of month global surveys of manufacturing and services, starting with China mid-week.
Looking first at Australia and the third quarter CPI figures will be lower than normal because of a number of changes in government charges, according to advice from the Reserve Bank. The CPI is estimated to have grown by around 0.4% quarter on quarter for an annual rate of 1.9%. The underlying measures favored by the RBA will be similar, according to market forecasts.
AMP chief economist, Dr. Shane Oliver says “higher fuel prices and tobacco excise will only partly offset by higher childcare rebates and lower electricity and gas prices.”
September building approvals (tomorrow) are forecast to rebound by around 3% according to Dr. Oliver (after their plunge in August).
Trade data for September will also be issued (Thursday) and credit growth for September and the commodity price index for the same month will come from the Reserve Bank on Wednesday and Thursday respectively.
September retail sales will be out on Friday (and the quarterly figure for far as the national accounts are concerned) and Dr. Oliver expects them to show growth of 0.2%. Business conditions surveys for manufacturing and services will also be released on Thursday.
Apart from the stumbling market, the major news this week for investors will be the full year results from the ANZ Bank on Wednesday, the NAB on Thursday and then Macquarie Group on Friday. Results will also be issued by CSR on Thursday and Orica on Friday.
In the US the focus will be back on jobs and wages with the October payroll data to be released Friday night, our time.
Dr. Oliver thins the data will show solid jobs growth of 190,000, unemployment remaining at 3.7% and an in wages growth to 3.1% year on year, which will get the eager beavers in the markets burbling on about inflation and rate rises. An increase is already forecast for the end of the year from the Fed.
The first estimate of third-quarter GDP showed activity in the US economy running at a still solid 3.5% (down from the annual 4.2% in the second quarter).
Tonight sees the Fed’s preferred measure of inflation and consumer activity release – the Personal Consumption Expenditure data “is expected to show a solid rise in real consumer spending and the core private consumption deflator inflation remaining at 2% year on year,” Dr. Oliver wrote.
As well the latest home prices are likely to show further gains and consumer confidence is likely to remain high (both tomorrow night), September quarter growth in employment costs (Wednesday) is likely to remain at 2.7% year on year.
Surveys of manufacturing activity will be released on Thursday, along with car sales data for October.
The September quarter earnings report continue with close to 140 companies due to update the market – watch for the Apple figures – its 4th quarter – on Thursday (Friday morning Australian time). They could help steady the fragile share market if solid; if there are any questions about the results, the tech-driven sell-off will continue.
In Europe, the brawl between the EU and Italy over the latter’s latest budget will continue to worry markets. Italy is now very close to seeing its credit rating downgraded again – this time to junk status.
Eurozone September quarter GDP data is out tomorrow night and is expected to show moderate growth of around 0.3% quarter on quarter or 1% year on year, unemployment is likely to have remained at 8.1% in September and core inflation for October is likely to have edged up to 1% yoy (both due Wednesday night, our time).
In London, the UK Government releases its Autumn Statement (Budget update) earlier than expected to cope with the timing of the Brexit move next March. New and higher spending plans are expected to be unveiled.
The Bank of England won’t move its key rate (0.75%) at its meeting on Thursday – it’s too close to Brexit happening.
In Japan jobs data tomorrow and industrial production figures on Wednesday will be very different – unemployment will remain around record lows but industrial output will be soft thanks to weakly growing demand in some export markets.
The Bank of Japan will leave monetary policy unchanged at its meeting and announcement on Wednesday.
In China, the two surveys of October manufacturing this week (Wednesday & Thursday) will be watched for signs any further slowing in growth.
