More central banks meet this week, led the Reserve Banks of Australia, New Zealand and India, earnings here and in the US and Europe and the start of the usual monthly Chinese economic data later in the week.
Those releases that will get extra interest because of Donald Trump’s inflammatory escalation of the trade war with China late last week whacked markets.
The big event globally is the release of non-manufacturing activity survey details for July – it is likely to be a middling to weak picture that’s painted for the EU, Asia, Australia and perhaps the US.
In Australia, the RBA meets tomorrow and is expected to leave rates on hold at 1% but maintain its easing bias.
The RBA is waiting to see the impact of its June and July rate cuts and the Federal Government’s tax cuts for low and middle-income earners and in particular, it wants to see unemployment start falling.
Tomorrow’s meeting will discuss the third Statement on Monetary Policy for 2019 to be released on Friday and new economic forecasts.
AMP Chief Economist, Dr. Shane Oliver reckons the RBA may again downgrade its inflation and growth forecasts and maintain guidance that rate hikes are a long way off and it stands ready to ease again if needed.
“We doubt that the policy easing seen so far will be enough to get unemployment below 4.5% and wages growth and inflation up to target and so expect the RBA to resume cutting later this year with 0.25% cuts in November and February,” he wrote at the weekend.
On the data front, expect the June trade surplus tomorrow to have remained around a record of $4 billion or so, weak housing finance data on Wednesday and ANZ job ads survey later today.
And the Australian June 30 reporting season kicks off in earnest this week with 13 ASX 200 companies due to report, with the Commonwealth Bank to most important on Wednesday.
Across the Tasman and the RBNZ will reveal its latest monetary policy decision midweek with a cut to 1.25% in its official cash rate tipped. The last meeting in June left the rate unchanged at 1.5%.
In Asia, the Reserve Bank of India is expected to cut its key rate on Wednesday. The Thai central bank also reveals its rate decision the same day. The central bank of the Philippines meets on Thursday.
Thursday sees the now closely watched Chinese trade data for July – analysts will be watching to see if the surprise rise in exports in June continues and the bigger than forecast fall in imports has spilled over into the following month.
Chinese inflation data will be out on Friday and the interest there will be on the impact of the African swine flu epidemic on food prices and whether the emerging signs of deflation in manufacturing has again forced producer prices lower.
Friday also sees Japan’s June quarter GDP released. The AMP’s Dr. Oliver says it is expected to show weak growth of just 0.2% quarter on quarter or 0.7% year on year.
In the US it’s a quiet week with the services sector activity report tonight and producer prices on Friday the major releases, and the June quarter reporting season into its last quarter (around 120 S&P 500 companies still to report).
Media companies will dominate, led by the New York Times Co, News Corp, Fox, and Walt Disney.
