This week sees a big test of the Australian market’s current bout of confidence on multiple fronts in what will be the first full week of trading in three weeks.
The Federal Government’s Commission of Audit report will be released on Thursday and will continue the flow of news ahead of next month’s budget.
Will it impact the markets and dollar? Hard to see at the moment.
The currency ended at 92.80 USc on Saturday morning, a bit weaker than the week before after the weak inflation figures, but it will remain solid this week.
There are also the earnings reports from the record-setting ANZ and Macquarie on Thursday and Friday respectively and quarterly sales figures from retail giants Woolworths and Wesfarmers.
Then there’s the monthly survey of manufacturing activity around the world late in the week – China’s two reports are the most important on Thursday.
The US Federal Reserve monetary policy meeting will be held mid week, followed by the release of the April jobs data on Friday night, our time, plus the first estimate of March quarter economic growth for the US.
And in Japan there’s the usual end of month data dump, plus the monthly meeting of the country’s central bank.
Tensions in Ukraine will see more sanctions announced against Russia, plus a big week for US corporate earnings (and for companies in Japan as well).
In Australia the bank earnings reports from the ANZ and Macquarie take centre stage – the ANZ is tipped to earn a record interim profit of more than $3 billion (it earned $2.97 billion a year ago) and pay a higher dividend.
Macquarie could report a profit of $1.2 billion or more and pay a higher dividend as well, despite weak trading results.
The health of the retail sector will be underlined this week with March quarter sales figures from Wesfarmers and Woolies.
The Wesfarmers figures will see investors looking to see how supermarket giant Coles is travelling, along with the group’s struggling Target department store chain.
Woolworths also reports its March quarter sales figures as well this week (on Wednesday).
The performance of its Master’s hardware business will be of interest, along with how the booming NZ operation is being impacted by the stronger Kiwi currency.
Woodside Petroleum will hold its annual general meeting and Origin will publish its third-quarter production report.
Beach Energy also releases its third quarter report mid week as well.
Stockland, which is bidding for rival property group, Australand, holds an investors day on Wednesday where it is expected to update the market on the bid and the prospects for success. It won’t win without a nice cash element being added to the paper offer of 1.11 Stockland security for every Australand security.
On the data front the Reserve Bank is expected to report a continued gradual improvement in credit growth on Wednesday, driven by the continued expansion of housing loans.
And, a slight rise in the AIG’s manufacturing conditions index for April is expected on Thursday. That’s part of the worldwide release of similar surveys the same day.
Producer price inflation data is out on Friday, while monthly figures for house prices on Thursday, and new home sales on Friday will also be released.
In the US, the Federal Reserve meets Tuesday and Wednesday nights, our time, and is expected to lop another $US10 billion from its quantitative easing, cutting it to $US45 billion and on track to end it by October.
The Fed will probably change its description about the health of the US economy after the severe winer, but there won’t be any updated economic forecasts or a press conference for chair Janet Yellen.
The unemployment data on Friday night will see another 210,000 jobs created, according to market forecasts and a fall in the jobless rate to 6.6%.
Other US data will include a modest rise in April pending home sales (tonight our time), continued strength in home prices and a slight rise in consumer confidence (both Tuesday night).
The first estimate of March quarter GDP growth will be released on Wednesday night, hours before the statement from the two-day Fed meeting on Thursday morning, our time.
The AMP’s Dr Shane Oliver says the first estimate will show the impact of the very cold winter, with the annual growth rate slowing to just 1.5% from 2.6% in the December quarter.
The estimate will be changed in a month’s time with more data on personal income and spending and foreign trade for March and the quarter, yet to be released.
The April survey of US the manufacturing will show a rise – possibly to 54 (it’s out Thursday night, our time) which will confirm the continuing strength of the US economy.
And the March quarter earnings results will also continue to flow this week.
Some of the biggest names in energy will release figures next week, including giants such as Exxon Mobile and Chevron, BP, ConocoPhillips and Shell.
Investors will be looking to see evidence these giants are cutting spending, as many have indicated they will.
Profits will be under pressure from weak prices, currency and the continuing surge in US oil production.
It wouldn’t surprise if they also reveal more cuts and project deferments.
Since the tech and biotech sell-off started on Wall Street on February 25, energy companies have been the best performed sector in the US markets.
Other companies to report include Time Warner, Viacom and Twitter.
A total of 239 of the S&P 500 companies have reported so far, with 75% beating earnings expectations by an average 5.8%, and 53% beating sales expectations, according to figures from the AMP’s Dr Oliver. Apple, Caterpillar, Boeing and Facebook have produced big results.
In Europe all eyes will be on the flash report on eurozone inflation for April on Wednesday night, our time.
Another low reading will further raise the pressure on the European Central Bank to try and halt the disinflationary pressures by introducing something like the Fed’s quantitative easing.
Eurozone confidence measures are out tomorrow night our time and are expected to show further improvement.
Unemployment data from some countries, and for the eurozone as a whole will be released late in the week.
In London, March quarter GDP figures for the UK will bereleased tomorrow night, our time. Retail sales figures for Germany, Spain and Italy will also be issued.
European companies reporting include Daimler, Deutsche Bank, RBA, BNP Paribas Nokia and Volkswagen.
In Asia, the manufacturing surveys for China are out on Thursday and will contain another reading showing the sector continues to be sluggish, but there could be the tiniest of improvements.
And the survey of China’s huge services sector will be issued on Saturday.
In Japan, the data for retail sales, unemployment and production are due out today, tomorrow and Friday.
The Bank of Japan meets midweek and could talk about further expanding its version of quantitative easing.
