This week sees the local economy’s health return to the forefront of market thinking with RBA Governor Glenn Stevens due to make a major speech while the Bureau of Statistics issue a series of reports for the third quarter national accounts due out the following week.
Elsewhere, a series of updates on manufacturing and services for the world’s major economies – but no longer China’s – will be out over the week, starting today, and in the US some major economic figures will also be issued which will have a bearing on the Fed’s decision on interest rates next month.
And in the US there’s a string of major data releases in what will be a very short trading week, thanks to Thanksgiving on Thursday and the near holiday trading day on Friday. The major data release is the second quarter GDP estimate tomorrow night (our time).
In Australia, September quarter data for construction (on Wednesday) and investment or capex data (on Thursday) are the major data releases for markets and economists to bury themselves in.
The construction data for the September quarter will reflect the downturn in resource spending, offset by the construction boom in housing and apartments, and could be a major part of the third quarter GDP report the following week.
The capex data for the September quarter will feed into the third quarter GDP numbers out Wednesday week, and the intended spending over the remainder of 2015-16 plans will be watched to see if the small improvement in the outlook for non-mining investment in the June quarter is continuing.
The combination of low interest costs, the low $A and slightly better confidence all point to a pick-up in non-mining investment but it has been slow in coming.
Governor Steven’s speech will be watched for any clues regarding the interest rate outlook. It will be entitled “The Long Run” and it will take a longer term look at our economy and prospects.
Mr Stevens also makes a second big speech on the economy the following week in Perth, the day after the last RBA board meeting for the year. That speech will be entitled Economic Conditions and Prospects.
Reserve Bank Assistant Governor Guy Debelle delivers a speech at the FX Week Europe Conference in London on Wednesday night, our time.
In the US, data on manufacturing conditions, consumer confidence, durable goods orders, personal spending and the Fed’s preferred inflation measure will be released and watched closely for any implications for the Fed’s decision regarding US interest rates next month.
The Markit manufacturing conditions survey (tonight, our time) is expected to remain around 54 (which is solid), consumer confidence (Tuesday night, our time) to have improved, durable goods orders growth to have risen in October after September’s fall, personal spending to be slightly higher and the core private consumption deflator to remain low at around 1.3% year on year (all due out Wednesday night, our time).
A fall in existing home sales is expected, but there should be a gain in new home sales; US home prices will again rise, and the September quarter GDP growth (Tuesday night) is to be revised up to 2% annualised (from the initial 1.5% estimate).
The third quarter reporting season is almost over. This week sees Tyson Foods and Post Holdings report results Monday, followed Tuesday by Campbell Soup and Hormel Foods.
Other companies reporting results include manufacturer Eaton Vance, discount retailer Dollar Tree, retailer Guess, paint and building products group Valspar, farm machinery giant Deere and Co and luxury jewellery group Tiffany. George Weston, the big Canadian-based food group, also reports this week.
In Europe LafargeHolcim, the merged cement giant reports its first combined results this week.
In the eurozone, Markit’s business conditions surveys (Monday) and economic confidence readings (Friday) are likely to remain consistent with continued moderate growth. Friday sees the release of the second estimate of UK third quarter GDP growth.
In Asia, Japan’s manufacturing conditions survey, out this morning, is expected to remain around 52.4 and labour market, household spending and inflation data will all be released Friday in the usual end of month data dump.
