More interest rate and currency speculation here and in the US and Europe this week with the minutes of the last Federal Reserve meeting in Washington expected to give a clue as to the timing of the next bout of quantitative easing, or more importantly, the likelihood of it happening.
Other data from the US will also give more information on the state of the economy which, after the weak jobs report on Friday night, is now approaching a dangerous period.
95,000 jobs were lost, far worse than any forecasts.
The optimists attempted to spin the ‘good news’ that 64,000 private sector jobs were created, but many of these were part time and in services. No sign of any growth in manufacturing employment.
The government said a revised 57,000 jobs were lost in August (54,000 originally reported and thought to be ‘good news’ at the time).
The unemployment rate was steady at 9.6%, but would have risen closer to 11% had not tens of thousands of more people not stopped looking for work.
The jobs news, and that fact that US consumer credit fell for a 7th straight month in August has now convinced US and other investors that the only way the economy can be saved from another slump is by the Fed spending hundreds of billions of dollars in buying more bonds, notes and other securities to try and force rates lower and kick start lending and the economy.
That’s why the minutes of the Fed meeting (out tomorrow night, our time) almost two weeks ago is now seen as vital in helping to find out when this next bout of easing will happen.
The Fed next meets on November 3 and 4, a day after the mid term elections in the US; it could be a climatic time for markets.
US mortgage rates are at record lows and still most of the lending is mortgage refinancings, not actual purchases or new homes.
And, over a quarter of all sales of existing homes (and more in some states) is actually sales of foreclosed homes at low prices, which is forcing house prices lower.
US markets are open tonight, even though it’s Columbus Day tonight, which means much of business will be shut.
This week will see retail sales figures for last month (the market is expecting a rise), consumer price and producer price inflation (rises are expected, though small ones).
Another reading of US consumer sentiment will be released as well and will be closely watched to see if there is any sign of an improvement (which would involve confidence going from a little to not very much).
The September quarter profits reporting season also starts in earnest with a number of very important results from manufacturing and technology.
JPMorgan Chase will be the first of the major US and global banks to report however and while it is expected to produce a moderate rise in earnings (thanks to lower bad debts and losses), its investment banking business won’t be good.
And the developing crisis in the housing title industry in the US (which is bringing all home foreclosures and re-sales to a halt) threatens new loses and problems for the entire sector, from the government through to insurers and major banks like JPMorgan, Merrill Lynch, Goldman Sachs and more.
Quarterly results will be issued by major manufacturers and exporters General Electric and Honeywell, while tech giants Intel, AMD and Google will also report.
Intel and AMD have already warned of lower sales and possibly earnings (the impact of the weaker dollar might help them, as well as GE, Google and other exporters) because of a downturn in sales of laptops, desk computers and note books as smart phones and Ipads take off.
Other big US corporates due to report include CSX, Safeway and Mattel.
In Australia a quiet week is expected compared to last week with its flood of figures on the economy and the non-decision from the Reserve Bank.
Housing finance figures for August are out later today. A small rise is forecast of 2%, but with approvals weak and sales of existing homes down, it’s hard to see how a rise can be sustained.
Credit card lending figures from the Reserve Bank of Australia are also due today.
Tomorrow sees the National Australia Bank business confidence and conditions survey for September released, and Wednesday sees the Westpac/Melbourne Institute consumer confidence survey for October released, as well as lending finance figures from the ABS.
The Bank of Queensland releases its full year figures on Thursday to become the first September 30 balancing bank to report, as usual.
But the major release of the week will be the third quarter production report from Rio Tinto on Thursday.
That will give us an update on the production and outlook of the world’s second largest iron ore miner and exporter.
OZ Minerals also produces its third quarter report.
Annual meetings will be held by companies including Healthlinx, Brickworks Investment Company, CSL, JB-Hi Fi, Transfield Services Infrastructure Fund and Sunland Group.
Internationally, the release of third quarter figures from China will dominate the end of the week with trade and lending data expected to September.
Trade figures are out tomorrow.
Complete third quarter data is due out next week. Car sales figures for September and the year so far may also be revealed.
Friday also sees the start of the annual Chinese Communist Party plenary session with the new five year economic plan to be revealed, but not in detail.
That won’t come until next March when the party Congress is due to be held.
Final industrial production figures for August are due out in Japan this week.
Singapore is due to release its third-quarter g
