It’s an end of month, start of month week for markets here and offshore with some important economic data such as the June quarter GDP figures for Australia, August jobs and unemployment for the US and the start of month surveys of manufacturing and service sector activity around the world, starting with China tomorrow.
As well September 1 sees the OPEC+ group meet to ponder lifting the output cap by 400,000 barrels a month for the next few months. The rise in Covid Delta infections and its impact on oil demand will be a major issue.
In Australia the focus will be on June quarter GDP (Wednesday) and national accounts.
The AMP’s Chief Economist, Shane Oliver sees a fall of 0.1% for the three months to June, but Moody’s predicts a rise of 0.3% and the NAB forecasts a small gain of 0.1%.
Dr Oliver said he expects the national accounts to show increases in consumer spending, plant and equipment investment and public spending being offset by drags from housing, inventories and net exports.
“Of course, at -0.1% it’s a close call and more data to be released on inventories, wages, profits and sales (Monday) and on trade and public spending (Tuesday) for the quarter could still blow our June quarter GDP estimate around,” Dr Oliver wrote at the weekend.
But the real interest is the outlook for the September quarter which is expected to see a contraction thanks to the widespread Covid driven lockdowns in NSW and Victoria especially. Dr Oliver sees a contraction of up to 4%, the NAB predicts a 3% drop. Moody’s didn’t venture an estimate.
In other data Dr Oliver says we can expect to see the June quarter Current account data is expected to see net exports detract -1.3% from June quarter GDP, building approvals to show a 2% bounce and housing credit growth to show a further acceleration (all Tuesday).
Business indicators later today will see data on wages, salaries and inventories – the latter usually has an impact one way or the other on GDP.
CoreLogic home price data for August on Wednesday is forecast to show a solid 1.5% gain led by Sydney and Adelaide. Thursday sees housing finance (a fall 2% in July, according to Dr Oliver) and the trade surplus to fall back to $9 billion (both Thursday) and retail sales (Friday) to confirm a 2.7% slump.
Wednesday also sees the start of month survey of manufacturing activity which crashed to a contraction reading in the mid-month update a fortnight ago.
The Australian June 30 earnings report season winds up today and tomorrow – See separate report – watch for reports from Fortescue Metals and Harvey Norman and a big loss from Crown Resorts
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In the US, the main focus will be on jobs data (Friday) for August with forecasts for a 775,000 gain in payrolls and unemployment falling to 5.2%.
The second estimate late last week showed the US grew at a 6.6% annual rate in the June quarter, slightly faster than the previous 6.5% and 6.3% rate in the three months to March.
Corporate profits surged, as the June quarterly reporting season confirmed – with much of the gains due to the low base effects from the June 30, 2020 quarter slump in profits and growth.
In other data, there’s pending home sales (today), consumer confidence and home prices (both Tuesday), the manufacturing conditions survey for August (Wednesday), the services conditions ISM (Friday) and the survey of service sector activity on Friday.
Car sales figures for August will be released Wednesday and Thursday and more than for other months, these figures will be watched more closely to see how production and sales have been again impacted by the severe shortage of computer chips.
Toyota, Ford, GM and other makers have already cut output or idled factories because of the shortage.
There’s a scattering of earnings results – Campbell Soup, Zoom, Broadcom, Hewlett Packard, Brown Forman, Hormel, Lands’ End
In the Eurozone, there’s inflation and core inflation for August (Tuesday) and unemployment (Wednesday), as well as GDP estimates for many European countries will be released midweek.
Japanese industrial production for July is expected to have fallen and jobs data will also be released on Tuesday.
Chinese official and Caixin business conditions PMIs for August (due Tuesday, Wednesday and Friday) are expected to fall slightly and underline the growing unevenness in the world’s second biggest economy.
June quarter GDP data for India will also be issued this week.
