As usual these days, central banks here and the in the US will dominate much of the week, thanks to the minutes of the May 7 board meeting of the Reserve Bank which produced that surprise cut in the cash rate, and then the appearance Wednesday night of Federal Reserve chairman, Ben Barnanke.
The Fed chairman appears before Congress Wednesday night, our time, and markets are looking for more information regarding Fed thinking about the tapering (or ending) of the current bound of quantitative easing. It is likely the impatient ones will be disappointed.
The Fed is clearly not ready to start telling the market what it wants to hear, but is in the process of slowly showing the market when a slowing in the spending could happen.
At the same time the minutes of the last Fed meeting will be out midweek. There’s usually more detail about policy discussions in this document and top of the list for markets this time is the question of when the end to the current round of spending is likely to happen.
Mr Bernanke speaks to Congress in the morning and the minutes will be released Wednesday afternoon, our time.
In Australia the RBA minutes tomorrow will not be all that much of a surprise seeing the central bank issued its second Monetary policy statement of the year three days after the May board meeting.
That statement contained the latest thinking on the state of the economy, forecasts for growth and inflation, and a detailed explanation of the thinking behind those new estimates.
There will be nothing new in the minutes, but watch the impatient and competitive financial news services find something and beat it up.
The Federal budget is behind us, the politicians are in election mode and speaking mostly anything that comes to mind, rather than thinking about what they might say.
Watch for the midweek address to the National Press Club in Canberra from Federal Opposition treasurer spokesman, Joe Hockey.
For the markets the key questions are the value of the Australian dollar, the sliding gold price, China and the state of the US and Japanese economies which are emerging as key to the strength of global economic growth.
Any gains from the rosier outlooks in Japan and from the US will be offset by worries about China, weak commodity prices and the unfortunate doom and gloom mentality that has once again gripped us.
The early estimate of how China’s manufacturing sector performed in May will be issued on Thursday.
You can expect markets to treat a poor figure with greater importance than one that shows little or no change.
Watch also for more upgrades or downgrades like we got last week from the likes of Coffey International, Virgin Australlia, Wesfarmers, Worleyparsons and UGL.
We are now in what’s called confession time – roughly six weeks or so from the end of the financial year when companies have a good idea of how they have gone financially, and whether shareholders and the wider market should be told.
Data releases locally are few this week – consumer confidence data to be released Wednesday and the skilled vacancy index (also due Wednesday) are the most notable.
Myer provides a third quarter update on Wednesday, while Ruralco and Elders will produce interim results. Leighton is the most notable annual meeting.
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Others include Australand (will there be an update on the GPT offer?), Iluka (an update on the slid in prices and demand) and Adelaide and Brighton (more on how the sluggish construction sector is hitting the company?)
Fisher and Paykel releases its full-year earnings on Thursday when James Hardie also details its fourth-quarter sales results.
