The June quarter and 2018-19 inflation outcomes will be out this week and with the Reserve Bank already making very clear that further rate cuts are on the cards, the data will be somewhat anti-climatic.
Economists say with a 10% rise in petrol prices in the quarter headline inflation will be around 0.5% quarter on quarter and 1.5% year on year.
That compares to an annual rate of 1.3% in the March quarter and 1.8% for the year to December 2018. (the quarter on quarter rate in the three months to March was zero).
A 1.5% annual rate is what Federal Treasury forecast in the 2018-19 budget in May 2018 and it would be a touch softer than the 1.7% forecast by the Reserve Bank in its May Statement on Monetary Policy.
Underlying inflation is likely to remain unchanged at a subdued at 0.4% quarter on quarter and annual 1.4% reflecting weak consumer demand, ongoing spare capacity, and intense competition.
In any case, the report will not have an impact on RBA thinking except to confirm that inflation remains too low.
In other data expect a further fall in dwelling approvals (Tuesday), continuing modest credit growth in June and 2018-19 (Wednesday), a 0.1% rise in July CoreLogic house prices (Thursday) and a 0.3% rise in June retail sales (Friday) with June quarter real retail sales up 0.3%, according to estimates from the AMP’s Chief Economist, Dr Shane Oliver.
June half earnings reports will start to flow but with only a couple of major companies led by Rio Tinto on Thursday afternoon which reveal a strong result thanks to high iron ore prices.
One thing to look for from the Rio result will be the lost revenue (and profits) from the continuing production problems Rio is experiencing in the Pilbara with disruptions to iron ore exports in January, March, the impact of Cyclone Veronica and the current mining and quality problems at its Brockman mining hub.
The monthly survey of manufacturing for July will be out on Thursday and is likely to show another contraction.
