Oil and US-China trade will be in the spotlight this week for global markets.
OPEC and Russia hold a two day meeting starting Friday to discuss whether to maintain supply cuts via a production cap that has supported global prices for more than a year (see separate story).
There is a feeling the cap will be cut – possibly by a million barrels a day. Oil prices fell noticeably last week on that expectation.
Saudi Arabia, OPEC’s de facto leader, and Russia have already said that production should be increased “gradually” if deemed necessary, but the extent and timing of potential supply curb reduction has yet to be decided.
The China-US trade dispute will continue with both countries last Friday trading 25% tariffs on a combined $US130 billion worth of goods. There are chances it could very well escalate.
And after the big three global central banks — the Federal Reserve, European Central Bank and Bank of Japan — met last week, second ranking central banks (such as the Bank of England) and a number of emerging economies will decided on interest rates in coming days.
The Bank of England is expected to keep interest rates on hold on Thursday, as is the Swiss National Bank.
Interest rate decisions from central banks in Brazil, Thailand and the Philippines on Wednesday, and Mexico’s on Thursday. Central banks in Taiwan and Hungary also meet for policy decisions.
There is a big meeting of central banks in Portugal on Wednesday – Fed Chair Powell, ECB President Draghi, BoJ Governor Kuroda and RBA Governor Lowe are all participating in a panel discussion.
The AMP’s Chief Economist, Dr Shane Oliver says it’s doubtful that any of them will say anything new having all just had meetings or made speeches, but no doubt their comments will be watched for any clues on the monetary policy outlook
In the US data releases are second tier – housing starts data due on Tuesday, house prices on Thursday, while business surveys will be out in the US on Friday and in other countries as well.
There’s a few US companies reporting – including Oracle and FedEx, both tomorrow night.
In Australia a quiet week with the ABS March house price quarter out tomorrow and likely to confirm a small fall.
Population growth data on Thursday for 2017 is expected to show continued strength of around 1.6% year on year with Victoria the strongest on the back of high immigration levels and interstate migration.
The minutes from the RBA’s last board meeting (also out on Tuesday) are likely to confirm that the RBA remains comfortably on hold, as Governor Phil Lowe made clear in a speech in Melbourne last Wednesday.
Telstra has its investor day on Wednesday with a lot riding on it (see separate story).
Those mid-month business surveys will be also issued for Asian and European economies. The Bank of England’s forecasts and commentary on future policy action will be closely watched against the flow of weak data for the economy in the past two weeks.
In Japan, inflation figures for May will be issued on Friday and will underline the reluctance of the Bank of Japan to start tightening monetary policy any time soon.