A holiday in the U.S. today will provide a brief respite from market activity, but attention will quickly shift to domestic economic data. On Friday, investors will closely watch U.S. jobs data, while Australian markets will focus on the June quarter national accounts on Wednesday.
Globally, the start of the month brings surveys of economic activity in manufacturing and services. Initial figures from China suggest a mixed outlook, with weaker manufacturing but stronger services sectors.
The June 30 reporting season in Australia has concluded (with a few stragglers expected today and tomorrow). Attention now turns to the July balancing companies in a couple of weeks and the crucial second quarter national accounts and GDP numbers on Wednesday.
Forecasters anticipate a weak reading for GDP growth, with estimates ranging from 0.1% to 0.2% quarter-on-quarter. Assuming no revisions to previous quarters, annual growth is expected to dip below 1%, potentially reaching 0.8% to 0.9%—a concerning sign of economic stagnation.
AMP chief economist Shane Oliver predicted weak consumer spending, flat dwelling construction, and business investment, offset by solid public spending and strong net exports. This would result in a continuation of the per capita recession, with per capita GDP declining in seven of the last eight quarters.
Oliver noted that the RBA's forecast of 0.9% year-on-year growth for the June quarter aligns with his expectations. However, he anticipates growth to fall well below the RBA's forecast of 2.6% year-on-year for the year ending June 2025.
NAB economists also foresee a weak GDP reading, with a 0.1% quarter-on-quarter rise and annual growth of 0.8%. This would be the weakest annual growth since the early 1990s, excluding the 2020 COVID lockdowns.
While NAB economists expect GDP growth to improve in the second half of the year, they acknowledge ongoing headwinds to household budgets and the potential boost from income tax cuts.
On Thursday, RBA Governor Michelle Bullock will deliver a speech that will provide insights into the national accounts, financial data for the June 30 financial year, and the economic outlook.
Before the release of the national accounts on Wednesday, several key economic indicators will be released: business data on inventories, sales, wages, and company profits today; current account and government finance tomorrow; trade, housing, and personal finance figures later in the week; and building approvals for July today.
Internationally, the U.S. jobs data will be released on Friday night, Australian time. Additionally, the Bank of Canada is expected to announce another interest rate hike mid-week.
