After the strong jobs report for February, all focus this week will be on the US and the run up to next week’s meeting of the Federal Reserve which will lift interest rates for the first time this year and for the first time under new chair, Jerome Powell.
A huge 313,000 new US jobs were created last month – the most for 17 months, the jobless rate was steady at 4.1% and wages growth slowed to 2.6% from a restated 2.8% in January (the original 2.9% reading got markets all hot and bothered and down when shares and up went bond rates – all for nothing).
So in the US attention will be on the February Consumer price Inflation data tomorrow night, and then retail sales for February on Wednesday.
The AMP’s Chief Economist, Dr Shane Oliver says the February data is likely to see core CPI inflation of 0.2% month on month (mom) leaving it unchanged on 1.8% year on year and underlying retail sales growth around 0.4% month on month.
The US producer price index (PPI) is also expected to be lower on a monthly basis but up on an annual basis.
The New York and Philadelphia manufacturing indicators and home builder conditions all Thursday should remain strong, according to Dr Oliver. He sees industrial production on Friday rising solidly, but housing starts (also on Friday) to have fallen a bit after a bounce in January
In Asia, China’s economic activity data for January and February to be released Wednesday will help give a better idea on how Chinese growth has started the year.
“Given distortions caused by the floating Lunar New Year holiday it will be reported as an average for January and February.
“We expect to see some slowing in retail sales growth to 9.9% year on year, industrial production to 6.3% and in investment to 7%,” Dr Oliver wrote at the weekend.
There are a few quarterly profit reports due out from the US – budget retailer Dollar General, software company Adobe and upmarket jewellers,Tiffanys which have been doing it tough in the past year.
In Australia, we expect the monthly NAB business survey tomorrow to show continued strength in business conditions and confidence, housing finance (also tomorrow) to be stronger and consumer confidence (on Wednesday) to improve.
Speeches by RBA senior officials Michelle Bullock, Chris Kent and Guy Debelle will be watched for clues on the outlook for rates. Their speeches follow the major exposition on the changing nature of Australian business investment given last week by Governor, Phil Lowe.
Premier Investments is due to release its half year figures this Friday, a week before Myer’s red ink stained results are expected to be issued.
In the UK the Spring economic statement from Chancellor Philip Hammond will take the spotlight tomorrow night. The expected highlight of the presentation will be the first-ever detailed presentation of how Britain’s payments to Brussels post-Brexit will impact public finances.
The forecast from the UK’s budget watchdog, the Office for Budget Responsibility, will be published as an annex to Britain’s economic and fiscal outlook.
