As markets eye higher levels in the coming week, the data flow will be less stressful than we have seen in recent weeks in most major economies but there will still be enough there to keep investors on their toes and wary.
Here down under there’s an interest rate rise across the Tasman, the June 30 earnings season in Australia and New Zealand as well as our figures on July employment and June quarter wages.
Later today China sees the release of the final economic data for July today – it won’t be all that encouraging and will show, like the trade and activity surveys, a mixed picture for the world’s second biggest economy.
And in the US there’s retail sales for July in a week when a slew of major retailers, led by Walmart, are due to report quarterly earnings.
The June 30 reporting season here and in NZ will dominate investor thinking this week as the season hits full bore (See separate story). Watch for a major results from JB Hi Fi today, BHP tomorrow, Fletcher Building and CSL on Wednesday and Brambles on Thursday.
June quarter Wage Price Index on Wednesday is expected to show a further modest lift to 0.8% quarter on quarter for an annual rate of 2.7%, according to the AMP’s chief economist, Shane Oliver.
He also says July’s jobs data on Thursday is expected to have remained strong with another 25,000 new jobs leaving the unemployment rate steady at 3.5%.
The Reserve Bank of New Zealand is expected to lift its official cash rate again by 50 basis points to 3%. The RBNZ has already hiked the official cash rate by a cumulative 225 basis point this year.
But inflation remains uncomfortably high at 7.3% year on year, topping the central bank’s forecast of 7%.
Moody’s economists say that although price growth appears to have peaked, “expectations for where inflation will sit two years from now are still above the RBNZ’s range of 1% to 3%. With inflation expectations not yet anchored, it’s important for the central bank not to let up.”
The AMP’s Shane Oliver also sees the RBNZ lifting rates by 0.50% which would be the fourth half a per cent rise in rates in a row this year.
Chinese economic activity for July is out later today and Dr Oliver is expected to show further improvement following the reopening from Covid lockdowns with industrial production growth rising to an annual rate of 4.5% and retail sales growth rising to 5% year on year.
The key figures to watch though will be property investment, property sales and prices.
Japanese June quarter GDP will also be released later today and Dr Oliver says the data is expected to show 0.7% quarter on quarter growth “reflecting a rebound from Covid restrictions earlier this year.”
He also predicts that inflation data for July on Friday is expected to show a further slight lift in CPI inflation to an annual rate of 2.6%, but core inflation remaining weak at just 1.1%.
Besides the retail sales data for July and the latest results from some retailers and others, the US will see an update on home builder conditions (today), housing starts (tomorrow), industrial production for July (also Tuesday) with retail sales on Wednesday. Walmart’s quarterly report will be out Tuesday.
The minutes from the Fed’s last meeting are also out Wednesday and US economists will be looking for any sign that will be less hawkish and hint at a slowing in the pace of rate hikes.
