A busy week with all of Sydney, Central Coast and Wollongong locked down for the next two weeks and Covid’s new Delta variant still spreading.
It will have an impact on the economy in the September quarter – we won’t find out until August and the July labour force report and then retail sales data in early September.
For people in the country’s biggest city, it’s a dramatic end to the financial year.
Besides the events in Sydney, the coming week end also sees the end of the month, quarter – and in Australia – the June 30 financial year (and half year for December balancing companies).
So get ready for an avalanche of data, reports and statements, not to mention surveys of manufacturing, car sales and more and reports on how investments like shares, bonds and commodities performed.
But as usual in the first week of each month, it will be the US jobs report for the preceding month – in this case May – that will dominate thinking and market sentiment.
Around 700,000 new jobs are forecast in Friday’s report with the jobless rate dipping lower, perhaps 5.6% from May’s 5.8%.
US Non-farm employment rose 559,000 in May, and has risen by an average of 541,000 over the past three months – not as strong as earlier in the year, but enough to have an impact on unemployment.
US car sales for June and the first half of 2021 will be out Thursday, along with the latest jobless claims data.
Aside from Friday’s labour force report, the May trade deficit will be released along with the Conference Board’s consumer confidence index, the monthly Case Schiller House Price survey for May, and pending-home sales, which should provide further evidence that housing demand continues to weaken.
Globally there’s the manufacturing activity surveys in major economies on Thursday, including Australia, as well as the quarterly Tankan survey in Japan (which attempts to track sentiment on various issues such as profits, exports, production, demand).
In Australia, the Federal Government’s Intergenerational Report (today) is forecast to project a smaller economy than previously expected reflecting the hit to immigration and hence population but the key to per capita GDP will be what happens to productivity growth.
AMP Chief Economist, Dr Shane Oliver says; “Unfortunately, in the absence of major economic reforms productivity growth is likely to remain relatively subdued.”
Locally the Reserve Bank releases credit data for May on Wednesday and its June commodity price index on Thursday.
A rise in housing credit growth is forecast reflecting record housing finance commitments while commodity prices eased, so the recent surge in the index is forecast to take a breather.
CoreLogic house price data for June will be out on Thursday and Dr Oliver says its expected “to show a continuing boom in home prices with another gain of 1.9% based on daily data so far this month”
The Australian Bureau of statistics releases what are expected to be strong ABS job vacancy data for May and a near record trade surplus of around $10 billion (all due Thursday). Housing finance data for May is out on Friday and are expected to have stayed around record highs.
In Europe there’s data on inflation and employment for June.
Dr Oliver says core inflation is expected to have remained subdued at around 1% year on year (out Wednesday) and unemployment unchanged at 8% (Thursday).
Besides the quarterly Tankan survey from the Bank of Japan on Thursday, Japanese jobs data will be released Tuesday, May industrial production data (Wednesday). Both are expected to show a fall, according to Dr Oliver
Chinese business conditions PMIs for June on Wednesday and Thursday are expected to be little changed on May. The outbreak of Covid in Guangdong province has impacted activity, especially exports as has power shortages in the south and southwest.
