Australian inflation dominates local events this week with a big quarterly rise forecast from the December quarter, but a modest annual rise.
Globally it’s the US economy in focus with the latest fed meeting and statement midweek, and then the first estimate of what will be a strong first quarter of economic growth and then an inflation and consumer spending update on Friday.
In Australia the March quarter Consumer price Index will show the continuing impact of Covid on supply chains, the rise in oil and fuel prices and various other rises in costs in housing, some areas of finance and a fall in travel.
According to the AMP’s chief economist, Shane Oliver, the March quarter CPI on Wednesday is expected to show a rise of 0.9% quarter on quarter or an annual rate of 1.4%.
He says that will reflect a 9% rise in petrol prices (which alone will Dr Oliver says will contribute +0.3 percentage points to inflation), a strong increase in new dwelling costs along with modest rises in rents and seasonal increases in health and education costs.
But the underlying inflation measures the Reserve Bank prefers are likely to be more subdued at 0.5% quarter on quarter or 1.2% year on year,
“But this would still be at a stronger pace than implied by the RBA’s forecasts back in February which forecast June quarter trimmed mean inflation of 1.25%yoy or an average of 0.25% in both the March and June quarters.”
Those forecasts will be updated in the second Statement On Monetary policy for the year to be released on May 7.
March quarter producer price inflation will be released Friday and private credit growth for March from the RBA (also Friday) is expected to show another acceleration in housing credit growth.
Australian earnings reports this week will include quarterlies from two US focused companies – Resmed and Atlassian.
As well Genworth Australia, now independent, is due to report its quarterly figures, along with construction group, CIMIC, which is controlled by the big Spanish group, ACS.
It’s also the final week for March 30 quarterlies – Newcrest, Beach Energy and Fortescue lead the way.
Quarterly updates come from Woolies and Coles and possibly Harvey Norman.
Elsewhere there’s a big week for the US economy (See separate story) with an estimate of first quarter economic growth, a two-day meeting of the Fed and a monetary policy decision, important data on industrial production, inflation and consumer savings and spending.
The US March quarter earnings reporting season gets serious this week ahead with companies to report including Apple, Amazon, Facebook, Tesla, Microsoft, Alphabet, Apple, Boeing & McDonald’s (See separate story)
In contrast to the US, March quarter Eurozone GDP on Friday is expected to have fallen by around 0.8% quarter on quarter as lockdowns again impacted.
Eurozone unemployment for March is likely to have held around 8.3% and core CPI inflation for April is likely to have remained weak at around 0.9% year on year (all due Friday). April confidence data Thursday will likely show a further improvement.
The Bank of Japan is tomorrow expected to leave monetary policy on hold but remain dovish and jobs and industrial production data will be released Friday.
Chinese business conditions activity surveys from the National Bureau of Statistics are out on Friday and are likely to see the composite PMI remain solid at around 55, according to an estimate from the AMP’s Shane Oliver.
