It is a bit hard to pick what’s not going to be an important issue for markets this week – from Australia, to China, Europe and the US, there are a series of issues, data releases or scheduled news events that will give sentiment and confidence a big shaking.
There’s the US budget imbroglio which will come to a head sometime in the next day and there’s also the usual start of the month flood of manufacturing surveys here, China and Asia, into Europe and the US, then later in the week the monthly surveys of service sector activity will be released as well.
On top of this there’s the US jobs data on Friday night that will restart speculation about the Fed cutting back on its stimulatory spending – the Fed won’t because of the uncertainty about the situation in Washington.
We also have central bank meetings in Australia, Japan, Europe and the UK – no change is expected from any of them, although the collapse of the Italian government will have the European Central Bank on edge.
Markets have been fairly blase about these events, especially the situation in Washington, but US interest rates are falling and the dollar rose late last week as some investors started worrying about this week’s deadline and then the further deadline around October 17.
In Australia the October meeting of the RBA board will dominate the week and there’s was no expectation of a rate cut in a survey from Bloomberg on Friday. But the post meeting statement from Governor Glenn Stevens will be watched to see if there are any more references to rising house prices.
Tonight, the ABC TV program, Four Corners has a story on the Reserve Bank and the bribery problems in its troubled associate companies. It is a story being done in conjunction with Fairfax Media, and there will be newspaper reports around this morning in the Fairfax press on this subject.
The RBA will also release the private credit data for August later today which will show a continuation of the recovery in home lending.
The monthly check up on the health of the economy starts with retail sales tomorrow for August, and trade figures and building approvals (also for August) out on Wednesday, along with new house sales data from the Housing Industry group,
Tomorrow also sees the release of the monthly survey of manufacturing activity from the Australian Industry Group. The monthly survey of services activity is out on Thursday.
Car sales data for September are due out later in the week as well.
In corporate news it’s a quiet week – lots of companies paying dividends. Toy group Funtastic is now expecting to release its result today, not last Friday as suggested a week ago.
Remember also that Westpac, the ANZ and NAB rule off their 2012-13 financial years tonight our time. The big three will report their results late next month or early November.
Offshore the major interest will come from the two monthly surveys of Chinese manufacturing.
Both Chinese surveys are due out today and tomorrow and are expected to show a further recovery in the level of activity in manufacturing.
The final HSBC/Markit survey report is out later today.
The early update last week surprised by being stronger than expected and the final report today, along with the report from the Chinese Government’s key logistics group, will confirm the rebound’s strength.
But the impact, while positive in Australia if the surveys are solid, will be muted by the confusion in the US over whether the government will shut down.
China is also closed part of the week for its Golden Week holiday.
That will influence share market trading there of course, and gold, copper soybean and oil markets globally because China is such a big buyer of these and other commodities.
In Japan, the usual flow of end of month data is out after the August inflation figures last Friday showed the biggest rise (0.9%) for years.
Today we will see industrial production and retail sales data for August, followed by construction orders and housing starts numbers. All are expected to support the idea the country’s economy is improving.
Tomorrow the quarterly Tankan survey of sentiment amount medium and large Japanese companies will be published by the Bank of Japan.
The results are expected to also confirm there’s been a significant upturn in confidence, especially among big companies. The key part of the survey is what business thinks about the prospects for investment over the next couple of quarters.
Prime Minister Abe is also expected to announce his government’s decision on a controversial lift in the country’s version of the GST – he’s tipped to OK a gradual rise to 8%, from 5% over the next three years.
In the US, the confusing and rather silly situation in Washington will overshadow market interest in the September jobs data, due out on Friday, as well as the monthly surveys of manufacturing and services. The monthly car sales figures are due out later in the week as well.
October 1, tomorrow (around Midday to 2pm), should see the budget situation resolve itself, one way or another.
US Factory orders for August are out on Thursday night (our time), with a rise of half a per cent tipped in business surveys.
And on Friday night, the biggest release of this week – the employment data for September.
Bloomberg is tipping the rate will hold steady at 7.3%. Estimates vary on the number of jobs – but it could top 180,000 according to the optimists.
If the government partially stops this week because of the funding impasse in Congress, the jobs data for October (in a month’s time) will rise.
In Europe, there are the meetings of the Bank of England and the European Central Bank later in the week.
As well, unemployment data are out in Germany and the euro area as a whole early in the week; German retail sales numbers are published in advance of French producer prices figures.
The flash estimate of consumer prices for the wider eurozone follow. Producer prices for the eurozone will also be issued and in the UK, consumer credit and money supply data will also be released.
