The coming week will see interest rate decisions in Japan and Europe, more earnings from the US, GDP data from China, retail sales figures in the UK and jobs in Australia.
The Bank of Japan and European Central Bank (ECB) rate decisions will be the dominating events (both on Thursday) for the week.
Given the current tantrum in bond markets about a change in monetary policy stances by the Fed, and suggested by the ECB, the two meetings and the decisions will be keenly watched.
The Bank of Japan will not change its stance, but could cut its forecasts for inflation on Thursday which will point to a longer than expected continuation of its huge quantitative easing policies.
The ECB will not make an change and go out of its way with assurances that its easing program is not going to change soon – but markets won’t believe that because they have in it their collective heads that the ECB will be forced to change by rising inflation and employment (regardless that this has already happened and inflation is now falling, as it is in the US).
Worldwide release of mid-month Business Outlook surveys from IHS Markit will give us an update on how various economies are traveling – there seems to be a worrying slowing of activity in the US, but not in China or the EU/Eurozone.
China’s second quarter GDP and industrial investment, production and retail sales are out today.
June quarter GDP growth is expected to be an annual 6.8% from the 6.9% rate in the first quarter – if it does it will be an inconsequential fall, regardless of what analysts might try to argue.
One figure today to watch is the investment figures for the property sector – another easing is forecast, while China’s property price index is out tomorrow with another easing forecast, especially in the major cities.
In Australia there are the June jobs data on Thursday. Given that we have had four solid months in a row, some analysts think there could be a weak month as a sort of ’ statistical giveback’. Perhaps 10,000 new jobs (the now standard estimate).
There are also three appearances by senior Reserve Bank officials, culminating in a speech on Friday by Deputy Governor, Guy Debelle, as well as the minutes from the July meeting which saw rates left on hold.
His speech is on the influence of global events on Australian monetary policy – a speech that will be made to make a point that all the speculation about a change in monetary policy stance by the RBA remains just that – speculation.
Another RBA official speaks on Friday and a third speaks on Wednesday, a day after the release of the minutes from the July board meeting.
So by early next week, when Governor Phil Lowe speaks we should have a good idea of the central bank’s current thinking.
The rise in the value of the Aussie dollar will occupy the thinking of the usual headline hungry alarmists amount business economists and media (and therefore worth ignoring for that reason).
June quarter (half year and full financial year) production and saes reports will be released this week by Rio Tinto and Oil Search (tomorrow), BHP on Wednesday, Woodside, South32 and Santos on Thursday.
Half year results are expected tomorrow from CIMIC (the old Leighton Holdings).
In Europe, the final inflation figures for June are out, while in the US there’s manufacturing data for the north east of the country and the Philadelphia area, while US housing starts and permits for June are out on Wednesday.
The US second quarter earnings season gets busier this week with nearly 70 companies due to report, while the season in the UK and Europe steps up.
Japan’s latest trade data is out on Thursday.
