Amid a welter of news, data, company reports and other events this week here and offshore, the Reserve Bank board meeting tomorrow and possible rate cut dominates for local investors and markets.
Offshore it’s the US jobs report for January, which is the major economic data release of global significance each month, especially with the US Federal Reserve edging towards a rate rise, possibly towards the end of 2015.
As well, there’s the start-of-month surveys of the health of manufacturing, and later in the week, services, especially in China; a number of central bank meetings elsewhere, with India and the UK standouts; and more December quarter, full year and half year profit reports here, in the US, Asia and Europe and the UK.
All in all there are half a dozen reports, data releases or company reports which could move markets this week.
In Australia, the Reserve Bank decision is covered in a separate story, suffice to say there could be a rate cut tomorrow, or at worst, a change in approach to set up a cut in March or April.
On top of that, the RBA releases its first monetary policy statement of the year on Friday which will elaborate on the reasons for tomorrow’s interest rate decision.
We also get the usual start of month figures for Australia for inflation from TD Securities and the Melbourne Institute, house prices for the major capital cities and nationally, building approvals (with a small fall expected tomorrow), a modest rise in December retail sales (out Thursday) but good quarterly growth in real terms.
The trade account for December and the December quarter will be issued tomorrow.
Car sales data from the industry for January will be out later in the week and business conditions for manufacturing (later today) and the service sector (later in the week).
Company results start flowing with JB Hi Fi issuing its interim figures today.
That will provide a good guide to how the retailers see the coming months.
A number of other groups such as OrotonGroup, Kathmandu and Speciality Fashion Group have already downgraded their expected results and outlooks.
Among other companies reporting this week are Echo Entertainment, Downer EDI, Flexigroup, REA Group, News Corp, Tabcorp and container refurbishment and hire group Royal Wolf Holdings.
The National Australia Bank is due to release its first quarter trading update on Thursday, while Brian Hartzer takes over as CEO of Westpac from today and is tipped to announce a management reshuffle later this week and other possible changes.
In the US, the January jobs reports will dominate the week, even though it will be issued Friday night, our time.
The AMP’s Chief Economist Dr Shane Oliver says the January payrolls “are expected to rise by a strong 235,000 with unemployment remaining at 5.6%”.
"However, the focus in the jobs report is likely to be on wage earnings which were surprisingly weak in December but are likely to have bounced back in January. The annual growth rate in wage earnings is still likely to be just below 2% though,” he said.
Productivity and trade data for the US will also be released and the latter will see revisions to the unexpectedly weak first half economic growth figure of 2.6% which was released on Friday night.
President Obama releases details of his 2015-16 budget, with requests for increases to domestic and military spending and some tax hikes. The Republican-controlled Congress will oppose those measures.
Also in the US the monthly reports on manufacturing (tonight) and services (midweek) will again be solid, showing the US economy continues to expand at a strong rate.
Car sales data will be issued tonight from the big car makers and importers tonight, our time, and will show a bright start to the year, thanks to the sharp fall in the cost of petrol.
US December quarter earnings results will continue to flow with around 100 major companies reporting their results.
Energy giants ExxonMobil (tonight) and BP (tomorrow night) revealing spending cuts after the likes of Shell ConocoPhillips and Chevron laid out their reductions late last week. Smaller oil groups such as Anadarko Petroleum also report.
Media groups reporting include 21st Century Fox on Thursday morning our time, and News Corp on Friday morning, our time. The New York Times is down to report tomorrow night as well. The biggest media group in the US, Walt Disney, releases its first quarter figures this week.
US iron ore miner Cliffs Natural Resources reports its December figures tonight – it has already written down billions of dollars of investment in its Canadian iron ore mines, and could do the same to its struggling Australian mines.
General Motors reports later tonight, while reports will also be issued by UPS, Chipotle, LinkedIN, Twitter and Yum Brands,
Offshore, results are due from Sony (which could also reveal yet another restructuring plan), GlaxoSmithKline, Toyota, Daimler, LVMH, big French bank BNP Paribas, Singapore Airlines and the Industrial Bank of Korea.
In the Eurozone, final January business conditions PMIs (Monday and Wednesday) are likely to confirm the slight improvements already reported in preliminary estimates.
But the fight between the eurozone and Greece over the renegotiating of the latter’s financial bailout will continue to dominate the headlines and market sentiment.
In London, the Bank of England will jot be changing rates for yet another month.
In Asia, the surveys of manufacturing and services will dominate the news flow this week, along with corporate earnings reports, especially from Japan and South Korea.
The second of two Chinese surveys of manufacturing – from HSBC/Markit – is expected to show the Chinese economy has made a weak start to 2015 after ending last year on a low.
The other survey, the official one from the government’s Purchasing Managers Federation, fell to 49.8 in January.
That was down from 50.1 in December, and the first time since September 2012 that the gauge fell below the 50-point level separating expansion from contraction.
The poor result in the survey was in spite of seasonal effects (the Chinese New Year holiday break mid month) that were expected to boost the result.
Chinese factories traditionally ramp up output just before the lunar new year holiday, yet the production sub-index fell to 51.7 in January from 52.2 in December.
Among other sub-components of the survey, imports slid 1.4 percentage points to 46.4, reflecting weakening domestic demand.
Input prices dropped 1.3 percentage points to 41.9 as energy and commodity prices continued their slide.
