One of the four massive weeks of the year for economic data around the world, especially in Australia.
Here we get the Reserve Bank decision tomorrow and 4th quarter GDP on Wednesday, as well as other start of the month figures.
In the US there’s the so-called Super Tuesday of primaries when 11 states vote for presidential candidates for both parties, that will influence markets in the US and offshore if Donald Trump does very well.
There’s also the world’s most important monthly data, the US jobs report, this time for February. We also get an update on the declining health of the Brazilian economy, the 2016-17 Indian budget will be delivered and the annual Chinese National People’s Congress starts next Saturday where the latest targets for Chinese economic growth, trade, inflation and other key measures will be confirmed.
And this week also sees the release of manufacturing activity surveys around the world (tomorrow), with two from China and then the release later in the week on surveys on services.
Both will give us a good idea how the global economy is travelling, especially China, Japan, the eurozone and the US where a survey last week sparked fears of a slowdown.
In Australia, the RBA is expected to leave interest rates on hold for yet month again tomorow, but maintain its easing bias.
The AMP’s Chief Economist Dr Shane Oliver says, “there has not been enough bad news since the last meeting to cause it to act on it (the easing bias for interest rates).
"Australian economic data has mostly been okay and financial markets have settled down a bit. However, I remain of the view that the combination of sub-par growth, low inflation and the threat of a rising $A as the Fed delays easing will prompt the RBA to ease again around May,” he wrote at the weekend.
Economists at Comsec said at the weekend, "The Reserve Bank Board is likely to highlight the need to assess more data to see how the economy is performing early in the New Year. Financial markets believe there is only a 6 per cent chance of a 25 basis point rate cut at the meeting".
And then there’s the 4th quarter and 2015 GDP figures in the national account for the three months to December, to be released on Wednesday.
Ahead of that there’s the usual final bits of data for the national accounts – business indicators on wages and salaries and business inventories today, the current account report and government financing data for the quarter, and then the GDP figures on Wednesday.
Dr Oliver forecasts a slowing in growth to a quarter on quarter figure of 0.4% from 0.9% in the September quarter and growth through the year of 2.5%, unchanged, with the big boost from trade in the September quarter being reversed in the three months to December, but solid domestic consumption and contributions from home building and property.
On top of this there will be figures from a private survey of inflation, industry new home sales of January, and then later in the week new car sales for February, credit growth for January (from the RBA today), February home prices tomorrow, the January trade figure on Thursday, January retail sales on Friday and building approvals for January tomorrow.
In the US, the major event is the ‘Super Tuesday’ primaries, when 11 states (including the key states of Texas and Florida) will cast their votes for the Republican and Democratic nominees. Ted (Senator) Cruz and Florida, Senator Marco Rubio (Texas) will be battling Donald Trump in the Republican battle – if they cannot win their home states, then Trump will be the Republican nominee.
Hillary Clinton should win most of the 11 states for the Democrats and go close to confirming her presidential candidacy for the Democrats. Her rival Senator Bernie Sanders is an independent Socialist from New England which doesn’t go down well with many of the people voting in the 11 states, especially Texas and Florida.
The US jobs market that will be in focus again on Friday night will see data for February released and economists are looking for 190,000 new jobs (as they did for January, when just 158,000 were created). The jobless rate will remain steady on 4.9%.
Tomorrow night, our time, sees the release of the US manufacturing survey for February, and the non-manufacturing survey on Thursday night, our time. The services sector survey will be issued later in the week.
Data for pending home sales (tonight, our time), construction spending (tomorrow night, our time) and trade (Friday night our time) will also be released along with the Fed’s Beige Book of anecdotal evidence ahead of the next meeting of the policy committee in mid March. Car sales for February will be issued tomorrow night as well. Brazil, which is South America’s largest economy, will also be in focus this week.
The country’s central bank is expected to keep its key interest rate at 14.25% on Thursday morning, our time, then the December quarter GDP will be published the next day (around 12 hours later) and it is expected to show a quarter on quarter contraction of 1.6% and a 6% slide from the end of 2014, which is a very deep recession. But it is its GDP figures, published the following morning, that will demand intense scrutiny. The economy is expected to have contracted 1.6% from a year earlier and be down 6% from the same quarter a year ago. Not the best of looks ahead of the Olympic Games this northern summer.
In Asia, the last of the monthly data for Japan will be out today and tomorrow-after last Friday’s very weak inflation figures (deflation is back), the data today on employment and retail sales won’t help sentiment, nor will an expected low figure for industrial production, except to encourage expectations of more spending from the central bank.
On Saturday, attention will move to China as Premier Li Keqiang delivers the official growth target for the year and the government budget at the opening of the National People’s Congress in Beijing.
Mr Li is also expected to outline the 13th five-year plan on national economic and social development for the period 2016 to 2020. Australian export performance will depend on these figures.
Eurozone inflation data for February will be released tonight, our time, and is expected to have remained low, while January unemployment data is forecast to have remained around 10.4%.
