Central banks, Australian earnings and politics in Canberra will dominate markets this week – especially in Australia – while the US-China trade war could either cool further this week or suddenly re-erupt.
On Wednesday, the Trump administration plans to impose new sanctions on Russia and the following day, the US is expected to impose 25% tariffs on an additional $US16 billion in Chinese imports, including motorcycles and steam turbines.
Beijing has threatened to retaliate with 25% tariffs as well including LNG.
Low-level talks between the two countries are scheduled this week on the trade issue but are not expected to go anywhere quickly.
In Australia the minutes from the RBA’s last board meeting out will show the Bank remaining comfortably on hold as Governor Phillip Lowe told a Federal Parliamentary Committee on Friday and the bank said in its recent Statement of Monetary Policy.
June quarter construction data skilled vacancy data will also be released on Wednesday. Don’t be surprised is there is a slowdown in vacancies and the construction data is a bit mixed.
The June 30 reporting season hits top gear this week with 70 major companies reporting – watch for reports from BHP and Woolworths (See separate story).
In the US, the minutes from the Fed’s latest meeting are out on Wednesday night and will be considerably different to those from the RBA by confirming that US central bank remains on track for another rate hike next month.
The Kansas Fed’s Jackson Hole central bankers’ symposium (Thursday-Saturday) will also be watched for any clues on monetary policy, with Fed Chair Powell confirmed as a speaker.
Interestingly the topic is very germane to Australia – all about low inflation, low wages and reasons why they are occurring now.
The US June quarter reporting season has exhausted itself.
The US hurricane season proper starts this week and runs through October.
On the data front existing home sales (Wednesday night), home prices and August business conditions surveys (both Thursday night) and July durable goods orders (on Friday night).
All are expected to confirm a solidly growing economy with a sugar hit from the trump tax cuts.
Eurozone business conditions surveys, also out Thursday will be watched for any improvement and any spillover from the troubles in Turkey.
Japanese inflation data on Friday is expected to show a slight improvement in inflation excluding fresh food and energy to around 0.4%.