It’s another big week in Australia for market-changing news from the economy and business, here and from offshore.
Bank profits, Australian interest rates and employment data, plus other figures which will tell us how the March quarter went, will dominate the coming week in Australia.
But we can’t forget China, our most important customer where the monthly trade and price data will be issued late in the week.
In Australia, tomorrow’s meeting of the Reserve Bank board won’t touch rates – it will see the post meeting statement emphasise the ‘wait and watch’ approach that has upset the Federal Treasurer Joe Hockey.
The bank board’s discussions will feature the latest economic forecasts, especially for inflation and growth, from the central bank’s staff.
Those will be included in the second statement of monetary policy for the year to be released on Friday.
Later that day RBA assistant governor Guy Debelle sits on a panel at a business lunch in Sydney.
All the economic data this week will tell us that the economy is doing better than the government wants us to believe, certainly in the lead up to the Federal Budget next week.
The data flow from the Australian Bureau of Statistics starts providing early clues to March quarter growth with the building approvals figures today, the international trade data tomorrow and the all important retail sales figures, also for March, out on Wednesday.
A 2% rise in building approvals for March is expected today, another trade surplus in tomorrow’s data and a small rise in retail sales is expected to be revealed on Wednesday.
Industry car sales figures will also be out mid-week, as well as tourism and travel data for March.
The key release though will be the labour force data for April on Thursday. Ahead of that we get the ANZ jobs survey report later today, also for April.
Economist forecasts for the April labour force data from the ABS range from the loss of 5,000 jobs, to the addition of up to 9,000 new jobs, and a rise in the unemployment rate back to 5.9%.
Victoria and Western Australia release their state budgets this week ahead of the Federal budget a week tomorrow.
Westpac’s interim is out today and the NAB reports its half year figures on Thursday, meaning the week’s trading on the market will be driven by the banks, which doesn’t bode well given the sell off post the ANZ’s record result last Thursday which helped drag the market down last week.
Both banks are expected to reveal record results with higher dividends, like the ANZ.
Caltex Australia, GPT Group and APN News and Media will hold their annual meetings this week.
In New Zealand, the country’s central bank meets this week and we’ll know Thursday morning if there is going to be another rate rise – if there is, it would be the third this year. The previous increase was only last month.
In Asia, China sees the second survey of manufacturing from MSBC/Markit released later today, and then the trade (out Thursday) and inflation data for April will be out on Friday.
The AMP’s chief economist Dr Shane Oliver says, "Chinese export growth is expected to return to positive territory after the weakness of recent months, but imports are expected to remain subdued".
"Inflation data on Friday are expected to show a fall back in CPI inflation to 2.1% and continued falls in producer prices," he wrote at the weekend.
In Japan, the Bank of Japan releases its minutes of this month’s meeting, and the huge Toyota car company is down to release its latest figures this week.
In the US the March quarter reporting season peaks this week, and appearances by Fed chair Janet Yellen will dominate the week, along with events in Ukraine.
So far a total of 375 S&P 500 companies have reported, with 75% beating earnings expectations, by an average 6%, and 52% beating sales expectations.
Dr Oliver says, “After earnings growth expectations for the quarter were slashed from +7% year on year in January to – 1% a month ago on the back of bad weather, they have now bounced back to +5%".
Around 75 S&P 500 companies are due to report this week.
That list will include a number of major media companies who will report this week.
Results from the two companies in the Rupert Murdoch empire – News Corp and 21st Century Fox – will be out late in the week.
Disney will report (it’s the biggest media company in the world) tomorrow night and will set the benchmark for the sector.
There may also be an update on reports AT&T is looking to buy DirecTV in a $US40 billion deal.
DirecTV also reports its quarterly figures this week, as does cable TV group Discovery which is controlled by John Malone’s Liberty Media.
AMC Networks is another cable media group to report.
CBS, Dish Media and Liberty Media, Echostar and Liberty Interactive also report their figures in what will be a huge week for the US and global media, especially with a whiff of takeover activity in the air in the US, such as the planned takeover of Time Warner Cable and its carve up by Comcast and Charter Communications.
Pfizer, the drug company bidding $US100 billion in cash for AstraZeneca, reports first quarter figures, as does Allergan, the botox maker, which is the subject of a $US50 billion takeover from a rival cosmetics company and a hedge fund, as does the under-pressure Sotherby’s auction company.
Tesla, the electric car company and market darling, reports on Thursday and could impact the market value of many tech companies if the results and comments disappoint.
Groupon, the once high flying buying company also reports, as does the games maker Electronic Arts. Organic retailers Whole Foods and Sprouts report quarterly figures as well and will be among the earliest of the major retailers to report.
The big insurer AIG reports this week as does other insurers, Prudential and Allstate.
Fed chair Janet Yellen reports to the US Congress on Wednesday and Thursday and investors will be looking for her views on the obvious rebound in the US economy in spring from the near halt in the winter dominated first quarter.
Her views on the 288,000 new jobs and fall in the jobless rate to 6.3% created last month will also be of interest to the markets which were surprised by the strength of the data.
On the data front, it’s a quiet week in the US. The monthly survey of the services sector is out tonight (and is expected to show an improvement) and the trade balance for March is tipped to show a small fall.
As well, preliminary non-farm productivity and unit labour costs figures, plus consumer credit numbers from the Fed will be published on Wednesday.
In Europe, The Bank of England and the European Central Bank meet on Thursday.
The BoE is not expected to change its policy, despite the obvious rise in economic activity.
But faced with another weak inflation reading in the eurozone of an annual rise of 0.7% in April (well below the 2% target), the ECB may unveil further monetary easing in response to weak bank lending, deflation risks and the still strong euro.
But Dr Oliver says the central bank may change its interest rates "rather than quantitative easing as the ECB does not appear to be ready for the latter just yet".
Retail sales data will be published for the euro area on Tuesday.
Dutch financial group ING reports its half year figures this week. Swiss banking giant UBS reports its quarterly numbers as well. They could include more provisions for legal action and fines.
German industrial giant Siemens reports its latest half year this week and may reveal a rival offer for part of French rival Alstom where General Electric is bidding to buy the former’s energy and power generation businesses.
Also reporting this week will be the London-based global steel giant ArcelorMittal, the Telefonica telecoms group of Spain, Petrobras Brazil’s energy giant and France’s telecoms equipment and services group Alcatel-Lucent.
