The focus will be on Australia given the Reserve Bank’s meeting tomorrow on rates, the June employment figures Thursday, housing finance and the ANZ job ads survey later today.
Overseas, it will be more of what we saw towards the end of last week with financial markets now seeing shadows and nastiness in every bit of data and reacting with increasing skittishness.
Perhaps the most interesting release anywhere will be the IMF’s first country report on China and the Chinese economy in three years.
That is likely to come towards the end of the week.
The Reserve Bank will leave interest rates on hold at 3% for the third month in a row following its Board meeting tomorrow because there is no reason for change.
The economy remains mixed, but not sick and we won’t get a handle on inflation in the June quarter for two more weeks yet, which makes the August meeting the one to watch for any rate trim.
Thursday’s jobless numbers will probably give the RBA more of a sign about the health of the economy in the last quarter.
The AMP’s Dr Shane Oliver believes 20,000 jobs to have been lost in June pushing the unemployment rate up to 5.9%.
We could also get the NAB’s monthly and quarterly business surveys, but we will see the ANZ job ads, housing finance and consumer confidence figures this week.
The housing finance figures will flesh out the surprise fall in building approvals in may and the very sharp fall in other private dwelling approvals in the same month.
Friday’s car figures from the industry will help stay the hand of the RBA tomorrow.
The Federal Chamber of Automotive Industries (FCAI) said on Friday 102,847 vehicles were retailed last month. (That is, shipped to retailers by makers and distributors)
The result was down 3.5% to the same month in 2008 but was the best month for the industry over the past financial year.
The June result last year was boosted by sales of luxury cars ahead of the tax change in the budget.
June took demand over the first half of 2009 to 455,223, down 16.1% on the same period last year. In March shipments to retailers were off around 23%.
The car figures come on top of the news that retail sales rose a stronger than forecast 1% in May as the Federal Government’s spending plans kicked in.
Tax changes in the stimulus packages for small and medium business seem to have driven much of the deals, with the 30% investment allowance rate for medium businesses ending on June 30 and the 50% cut continuing for small business until year’s end.
It’s a week light on for corporate filings. AGMs for SP Ausnet and CSR stand out.
The IMF’s report on China is due to be considered by the board of the Fund mid week and a draft is understood to have been completed last week. The team visited China in the first two weeks of last month.
The Fund and the Government have been arguing over the wording of the report for over two years (the last report was in 2006), especially sensitive has been China’s policy towards its currency.
Bloomberg reported Friday that the Fund has softened the language used to characterize exchange rates ahead of the report’s release.
The report give us the most up to date assessment of the current health of the world’s (And Australia’s) most important economy. For that reason it will be closely scrutinised, especially at the Reserve Bank.
There will be a lot of reporting, but little concrete to emerge from the G8 meeting in Italy from the 8th to 10th.
The US dollar, the global economy, global warming are among some of the issues. The G20 meeting in April in London was of greater importance.
The Group of Eight includes the host nation, U.K., Canada, France, Germany, Japan, Russia and the U.S.
President Obama makes his first visit to Russia tonight, our time.
Alcoa leads off the US second quarter results Wednesday and analysts reckon it won’t provide much in the way of clear guidance or commentary on the market for the metal.
The company has struggled as collapsing demand pressures volumes and prices. Analysts polled by Thomson Reuters expect the company to reveal a third consecutive loss, with revenue cut by around half.
Besides Alcoa, plastic supplier, A. Schulman Inc. and Pepsi Bottling Group (Which Pepsi Co wants to takeover completely) are among the few companies also posting quarterly results.
Perhaps the more intriguing of the results will be from the discount chain Family Dollar Stores Inc. which reports Wednesday.
It has done very well in the US recession with its range of low priced variety goods, as have other lower end stores (Like the $2 shops and The Reject Shop in Australia).
Thomson Reuters sees earnings for S&P 500 companies are expected to decline by 35.5% in the second quarter, while all 10 sectors are anticipated to fall, healthcare should fare the best, slipping just 2%.
The materials and energy sectors are forecast to do the worst, falling 78.9% and 64.7%, respectively.
Most major retailers in the US are expected to report a decrease in June same-store sales Thursday, compared with a small increase a year earlier.
Retailers will report June comparable (same store) with a fall of around 4.5% in June tipped. If achieved, that will be sharply down on the 1.9% growth in June of 2008. 2008 was boosted by the tax rebate stimulus package last year.
But a warning: the year-to-year comparison is skewed, as Wal-Mart Stores, the world’s largest retailer which has expanded sales and market share in the slump and therefore skews the figures, no longer reports monthly figures.
The major economic reports include the Institute for Supply Management’s services index for June, the t
