It’s one of those start of month deluges of economic data this week in major economies, added to the continuing surge of June quarter, half year and yearly financial results here and in the US, UK, Europe and across Asia.
Central bankers will also be a big feature this week – they will feature the central banks in Australia, India, Japan and the UK releasing their monetary policy decisions. Banks in Hungary and Brazil will publish minutes of their last meetings
Dominating events globally will be the US jobs report for July on Friday night (if it’s 220,000 plus then a September rate rise looks certain).
Our jobs report for the same month a day and a half earlier will hold a similar fascination for local markets, after the Reserve Bank meeting tomorrow to examine monetary policy.
As well there’s the usual start of monthly economic data here as well including retail sales, trade and job ads, as well as the stepping up in June 30 results.
And next weekend sees the release of vital trade and inflation figures for China, after we get the second survey of Chinese manufacturing later today, and then the succession of start of month surveys of other economies over the next 24 hours.
In Australia, the RBA will probably leave interest rates on hold tomorrow, but the AMP’s chief economist Dr Shane Oliver cautions that “it’s a very close call and it wouldn’t surprise me at all if they cut”.
“Recent commentary from Governor Stevens suggests the RBA is not in a hurry to cut rates again and stronger than expected jobs data in recent months, the fall in the $A and a desire to confirm that APRA’s efforts to slow property investment are working all suggest the RBA will leave rates on hold on Tuesday.
“However, the odds are strongly skewed in favour of another cut, if not Tuesday then in the months ahead thanks to the bleak outlook for investment, continued sub-par economic growth, the $A still being too high, inflation remaining benign and increasing signs that APRA’s efforts to rein in property investment are starting to really bite,” Dr Oliver said in a note at the weekend.
The meeting tomorrow will consider the RBA’s August Statement on Monetary Policy which will be released on Friday. Dr Oliver says this “will likely confirm that the RBA retains an easing bias”.
And then there’s the usual start of month data avalanche that occurs at the start of each month.
So today we get jobs ads, the Core Logic-RP Data home price growth data for July, the trade balance and retail sales for June and the financial year (both Tuesday), housing finance for June as well on Thursday, car industry sales figures for July midweek and the July employment and unemployment report, also on Thursday.
There’s also the TD Securities inflation gauge, the surveys of manufacturing and service sectors from the Australian Industry group and monthly new home sales data from the Housing Industry Association.
Dr Oliver says the jobs data will see around 5,000 new jobs created and the unemployment rate rising to 6.1% (Thursday).
The June 30 reporting season sees seven major companies reporting this week, led by the interim from Rio Tinto on Thursday.
The board of Fonterra is due to meet on Friday to decide on a new milk price for most of NZ’s dairy farmers.
For Australia, the reports on China will also be important – the final Markit survey of manufacturing later today and then the services survey mid-week.
The official Government survey was released on Friday and showed a slowing in activity in manufacturing, but a solid rise in activity in the services sector.
Next Saturday sees the trade data for July released with focus on the strength of exports (likely to be weakish) and the fall in the value of imports because of weakening commodity prices.
On Sunday the consumer price inflation data for July will show another rise, thanks to reports of rising pork prices, but the intense deflation gripping China’s manufacturing sector will continue.
The Market surveys for other economies in Asia, the eurozone, Europe and the US will be released this afternoon and overnight. They are a valuable health check about the strength of economic activity in economies across the world.
In the US the focus will be on the July survey of manufacturing conditions tonight our time (from a US industry group) and then the services survey midweek.
Car sales figures for July will be out tonight and tomorrow our time and will show a continuation of solid demand for big vehicles.
And Thursday night in the US sees the top 10 Republican presidential primary candidates, from the 17-candidate field, in the first TV debate for the 2016 presidential election in Cleveland.
The debate is hosted by Fox News and Facebook and will see the top 10 candidates (according to the average of five national opinion polls) go head to head. The rug (AKA Donald Trump) will feature.
US June quarter earnings continue this week with around 64 S&P 500 companies due to report, headed by some major media groups including Walt Disney, 21st Century Fox, Time Warner, Time Inc, Liberty Global, Liberty Media, CBS, Charter Communications, Cablevision and the New York Times.
But probably the result to watch will be electric car and battery group Tesla, whose June quarter report will be out Wednesday night, our time.
Along with Amazon, Netflix, Apple, Facebook and Twitter, Tesla is one of the bellwether stocks for the current direction of the US sharemarket where high profit, high growth tech related stocks dominate.
A good result, including solid data on sales of its electric vehicles, will give Wall Street a bit of a kick along, but a result considered to be weak could see a sell-off.
In Asia, the Bank of Japan meets on Friday and is unlikely to change monetary policy.
Other data out in China this week will be lending figures and car sales late in the week, or over the weekend.
In Europe and the UK there’s the start of month surveys of manufacturing from late today onwards.
They will show the UK and eurozone economies are enjoying reasonable growth, especially Spain and Ireland.
The Bank of England meets on Thursday night, our time, and could indicate a firmer timetable for the first rate rise for years. The bank’s inflation report will be released at the same time as the rate decision.
Like the US, such a move is coming closer in Britain.
