Overseas it’s the Fed and the health of the US economy, here it’s the health of the Australian economy ahead of the vital Reserve Bank meeting next week, and the gathering pace of June 30 financial results.
As well, the health of the Chinese economy will come to the fore with the release of the two monthly surveys of Chinese manufacturing activity on Thursday – they will show a further slowing, with the final HSBC survey for the month confirming the sharp fall in the so-called ‘flash’ report 10 days ago.
At home we will have building approvals for June out tomorrow – with most forecasts pointing to a rise of 2% to 3%. As well, there’s the private credit figures for June from the Reserve Bank on Wednesday and the usual monthly surveys of manufacturing, inflation and new home sales for release on Wednesday or Thursday.
The Australian Bureau of Statistics will release figures for house prices for the June quarter, import and export prices and producer prices (watch for the emergence of the weak dollar’s influence).
And the RBA’s index of commodity prices for July is out later in the week.
And Reserve Bank Governor Glenn Stevens will be speaking in Sydney tomorrow in what has become an annual address to the Anika Foundation.
He doesn’t usually canvass hardcore economic matters in this speech, and coming a week before the RBA board meets for its August meeting, it is unlikely that there will be anything substantive on current monetary policy in Mr Stevens’ address or the answers to the questions after he speaks.
In the corporate area, the results season picks up pace this week with the likes of Navitas, Resmed and Transurban releasing their results.
The Rio Tinto subsidiary, Energy Resources of Australia, will release its interim results ahead of its parent’s interim figures next week.
The AMP’s chief economist Dr Shane Oliver says, "The focus in Australia will also start to shift to the company reporting season, with much nervousness given a string of recent downgrades on the back of the soft economy.
"However, consensus estimates for 2012-13 earnings growth have now slipped to a fall of 1% from +12% earlier this year, so a lot of bad news is already factored in. Resources profits may show signs of bottoming, but domestically exposed cyclicals are vulnerable to further weakness.
"On the positive side though, ongoing cost control and the fall in the $A are likely to be supports for the profit outlook going forward, with the fall in the $A to date potentially boosting profits by around 3%."
Whitehaven Coal is due to release its quarterly production as will Intrepid Mines and Beach Energy.
Paladin Energy and Origin Energy also release their quarterly figures this week.
Woolworths’ fourth quarter sales are out tomorrow.
Besides the flood of data in the US this week, the second quarter reporting season has what will be one of its heaviest weeks so far with 131 S&P 500 companies reporting.
These will include media giants the New York Times Co, Time Warner Cable, oil and gas giant Chevron, US Steel and Allstate.
Chevron will provide an update on the progress of its two huge LNG projects in WA, Gorgon and Wheatstone.
Reuters said that so far 259 of the 500 companies in the S&P 500 index have reported and results are a bit better than expected.
Reuters says second-quarter earnings are now expected to have increased 4.1%, up from an estimate of 2.8% the previous week.
In Asia, there are the two surveys of Chinese manufacturing to be released on Thursday – hours after the US Federal Reserve makes its usual post meeting statement.
In Japan we get the usual end of month data on industrial production, retail sales and employment – all tomorrow.
After the encouraging inflation report on Friday, there should be more signs that the government’s expansionist policies are having an impact on the wider economy.
And watch the Eurozone, where economic confidence indicators tomorrow and the usual flood of corporate results are expected to show further improvement, along with the monthly surveys of manufacturing for some economies due out on Thursday.
Eurozone inflation will be modest as well – and the tone of the data is expected to once again hint that the eurozone economy is on the turn.
NOTE: The US GDP data on Wednesday night will also include revisions to the past five years, and changes to the way GDP is worked out. For the first time the value of research, development and copyrights as investment, and the impact of pension deficits.
Economists say this will add at least 3% to US GDP (or close to $US500 billion in one go). Other revisions might be made in current data that sees GDP growth in the first quarter and in 2012 boosted sharply as well.
