Now for one of the biggest weeks of economic data this year (it will be repeated three more times in 2014), with central banks meeting to consider monetary policy decisions (including the Reserve Bank), jobs reports in the US and Canada, economic growth data in Australia, and the tail end of profit reporting seasons in several markets.
Besides Australia, central banks in the UK, Canada and the European Central Bank will hold their monthly meetings this week.
As well there’s the usual monthly surveys of manufacturing and services, starting with Australia and China today.
Car sales data for several countries (led by the US are also due). And the usual Chinese monthly economic data starts flowing next weekend.
In Australia, the RBA meets tomorrow and is expected to leave interest rates on hold for a sixth meeting in a row.
The RBA has clearly indicated that with growth remaining low but tentative signs of improvement in some indicators, a period of stability in interest rates is appropriate.
Since not enough has really changed since the last meeting, this remains the case.
The AMP’s chief economist Dr Shane Oliver says the weak jobs report for January and the news last week of the poor business investment outlook for the next 18 months or more, "do suggest though that our expectation for rate hikes to commence later this year may be premature with the risk being that they won’t occur till next year".
RBA Governor Glenn Steven’s first Parliamentary testimony of 2014 on Friday will be watched closely for his views on the jobs and investment front.
They are the two crucial areas of the economy and will have to be addressed in the next Federal budget in May.
But on top of the RBA meeting, there’s an avalanche of data this week with the major release being the December quarter GDP numbers on Wednesday.
Some economists still reckon they will be around 1% quarter on quarter, or 2.8% for 2013 as a whole.
The key will be the business indicators (stocks, wages and salaries), the quarterly current account and government spending data (all due today or tomorrow).
In view of the weak construction and investment figures, many analysts have cut their forecasts. Dr Oliver reckons it will be 0.3% for the quarter, with growth falling to an annual rate of 2.1%.
Other data includes the surveys of manufacturing, house prices, new home sales and ANZ job ads all due today. The monthly survey of the services sector is out on Wednesday.
January building approvals are out tomorrow, retail sales on Thursday and car sales are due out on Wednesday.
In the US, the main focus will be on February manufacturing conditions indicators (due Monday) and employment data (Friday), with the latter set of figures investors will be watching like a hawk, along with the US Federal Reserve.
Both though will be impacted by the very cold winter that much of America has been enduring.
The weather will show up in some of data due out tonight. The US sees updates on personal consumption expenditures, personal income and personal spending data and construction spending numbers.
The poor weather has already confused data for December and January, and February will be the third month where the figures will be influenced by the weather.
The second estimate of US GDP, released Friday night, showed a slowing to an annual rate of 2.4% from the first estimate of 3.2%, with lower consumer spending the main reason for the fall.
And the reason for that was the impact of the cold winter – in fact the US northeastern states have had 14 major storms so far this winter.
Dr Oliver of the AMP says the "manufacturing conditions PMIs are likely to present a divergent picture with the ISM index likely coming in around 52 but the broader Markit index remaining solid around 56.7 in line with its advance reading.
"With a snowstorm affecting some of the US when the February employment survey was undertaken, payroll growth is likely to have remained relatively soft at 150,000 and unemployment is likely to be unchanged at 6.6%,". The services sector survey is out on Wednesday.
On Wednesday, the Fed releases its Beige Book for the next meeting of the central bank later this month.
In the Eurozone, the ECB (Thursday) is likely to finally expand its easing bias, possibly cutting interest rates a bit further and maybe announcing a form of quantitative easing involving the purchase of bank loans, according to Dr Oliver.
Eurozone GDP is growing again but it is still gradual, lending growth remains depressed and there is a risk of deflation. Inflation last month was an annual 0.8% against the 2% target rate for the ECB.
Factor orders and industrial production data for last month are due out in Germany and several other countries in the eurozone during the week.
In China, HSBC/Markit full report on manufacturing is due for release later today.
The official survey on the weekend showed a small fall, but remained in expansion territory. The monthly services sector survey is out on Wednesday.
As well, the National People’s Congress (starting Wednesday) will likely set a growth target for this year of 7.5%, but the key focus will be on the approval and enactment of further financial deregulation and various fiscal, administrative and welfare reforms flowing from the 3rd Plenum last year.
Chinese data for February will also start to flow with trade figures (due March 8th) which will be examined very closely to see whether the 10% growth in exports and imports reported for January continued in February. They probably won’t, given the New Year holiday in the first week of the month.
