China returns to the top of the global scare list this week, as does the oil industry – specifically that meeting of OPEC next Sunday.
In Australia the big news will be the release of the March jobs data on Thursday.
For China it’s the release of March monthly and quarterly economic data, including the all-important GDP figure.
These are all estimates (as is all data) and in China’s case these that is a very important point to keep in mind.
So this week, the timetable of data releases are – bank loans were out yesterday; today – CPI and PPI (producer) inflation; Wednesday – trade (and the performance of import sides of the estimates); Friday – quarter-on-quarter GDP for the March quarter, industrial production, retail sales, urban investment (including the rebounding property sector). Monday week there’s house prices and later next week the year-on-year GDP figures.
Things to watch out for Australian investors – bank lending and whether it is going into property (and the size of the rebound in property investment and if the recovery in house price growth is continuing and widening across more of the country – keeping in mind this can only be a temporary help. Imports of iron ore, copper, oil, soybeans, coal, LNG and exports of steel (Whyalla) and coal (China is starting to boost sales of unwanted coal into Asian markets).
And look to see if the growth in retail sales picks up, or continues to slow as it has been doing for the past three months. Solid retail sales have been one of the rare bits of good news from China.
And Internationally, watch for the International Monetary Fund to release its updated world economic forecasts ahead of the (northern) spring meeting (with the World Bank) in Washington.
The World Economic Outlook (WEO) will be out tomorrow night, our time. The spring meetings, along with the World Bank, start in Washington DC on April 15.
The IMF will conduct seminars which will also focus on the role of China in the global economy (timely given China’s data dump this week) and ways to strengthen the international tax system as tax inversion deals have come under scrutiny, and the release of the Panama papers. Cybersecurity and the rise of FinTech are also on the agenda.
Watch In the WEO for a downgrading of global economic growth forecasts from 3.4% for this year to closer to 3%, and a trimming in its estimate for China.
China’s sluggishness will be partly to blame. GDP for the March quarter should come in at an annual rate of 6.7% or 6.8% according to most forecasts.
Remaining international, and the OPEC meeting next Sunday, April 17 will discuss freezing supply at current levels.
While it will be watched closely, the main issue is whether Iran is included in any supply freeze. Iran has made it clear it won’t freeze its output as it’s still recovering from the removal of sanctions, and is aiming to lift supply to 4 million barrels a day.
The AMP’s Chief Economist Dr Shane Oliver says for that reason “it’s hard to be optimistic as to the impact of an oil supply freeze if it just includes the other members (assuming Saudi Arabia agrees to that anyway) because overall supply from OPEC output would still be rising as Iran ramps up its production".
In the US expect to see better growth in March retail sales (tonight our time), CPI inflation of 1% year on year and core inflation of 2.3% year on year (Wednesday night our time) and another slight fall in industrial production (Friday night our time).
The Fed’s Beige Book of anecdotal evidence (Wednesday) will also be released. It’s the first round of reporting on the US economy the Fed members will see ahead of the two-day meeting late this month.
Early tomorrow morning, our time, Alcoa kicks off the US March quarter earnings reporting season.
And in Canada, the country’s central bank releases its latest interest rate decision midweek.
In the UK the Bank of England announces its latest monetary policy decision on Thursday. It is now widely expected that the bank will hold off on raising interest rates until 2017.
And in the eurozone, Eurostat releases industrial production numbers for the zone. Final inflation data for March will also be released. In Australia, we can expect to see a rise in housing finance for February (later today), little significant change in business and consumer confidence (Tuesday and Wednesday respectively).
Dr Oliver sees a 20,000 jobs gain in the March Labour Force figures from the Bureau of Statistics, and a slight rise in unemployment to 5.9% (on Thursday).
The RBA’s half yearly Financial Stability Review (Friday) will be watched for an update of the RBA’s assessment regarding risks around the property market and bank bad debts.
