After the past couple of weeks it looks like a quiet week ahead for events and data, except for a couple of things – the usual step up in the US quarterly reporting season and the latest policy meeting of the European Central Bank.
There are also the ripples from the atrocity in Nice and the attempted coup in Turkey on Friday night and Saturday, but they will not be as dramatic as they were late last week and on Saturday.
The Fed is heading for an important meeting the following week, so after 14 speeches and public appearances last week, the news flow from the US central bank will ease sharply this week.
In Australia it will be a quiet week with the naming of the new Federal Cabinet perhaps the major event – and the Federal Opposition’s frontbench.
The European Central Bank is expected to sit pat and not make any change to monetary policy when it meets Thursday, night our time, – like the Bank of England it will be in wait and watch mode while it assesses the economic fallout from the Brexit vote and market turmoil (which now seems to have faded).
Watch also for a possible deal on bailing out Italy’s banks which have too many bad debts and not enough capital.
Globally, the big news event is the July business conditions surveys on Friday which will be watched for any impact from the Brexit vote.
With the Bank of England having last week held off from any additional stimulus in the wake of the UK’s vote to leave the EU, the flash survey for the UK will provide clues to possible action in August.
The flash figure will cover both manufacturing and services, with a series of weighted ‘composite’ indices providing a comprehensive picture of economic growth, employment and price trends in the aftermath of the ‘Brexit’ vote (data is being collected 12-21 July).
Economists say the survey figure for eurozone and EU will also be of considerable interest as there are signs that activity has been slowing in the past month.
In the US, the manufacturing survey’s flash report will show an economy going well and feed into market confidence that the Fed will change its interest rate rise stance at its meeting the following week.
Housing starts and permits to build new homes for June are out tomorrow night, our time, and existing home sales on Thursday night, our time.
The Republican convention (from tonight to Thursday US time) in Cleveland will see the focus on the November presidential election ramp up.
And the second quarter reporting season steps up in pace this week with more than 90 S&P 500 companies reporting.
The reports will be led by several banks, such as Goldman Sachs, tech companies like Microsoft and UBM, pharma giants Johnson & Johnson from the US and from Europe Roche, and several airlines such as American, and major manufacturers such as GE and GM.
Japan’s manufacturing PMI for July (on Friday) will be watched for an improvement from the June’s low reading of 48.1 in June.
And in Australia, the minutes from the last RBA Board meeting tomorrow will suggest that the door is open to another rate cut should the June quarter CPI data due on July 27 confirm that inflation remains lower than desired.
But the NAB survey of business conditions last week was good, meaning there will not be any need for an interest rate cut for a while. Business confidence was also be solid despite the survey being conducted during the UK’s Brexit vote volatility.
And figures on skilled vacancies will also be released late in the week. In the corporate area a number of leading resource companies release June quarter production and sales reports this week, starting with Rio Tinto tomorrow, BHP Billiton on Wednesday, Woodside Petroleum on Thursday and Santos and OZ Minerals on Friday. BHP’s will also be the financial year figures – the others will be June half year figures as well.
