Diary: RBA Rates Call, US Jobs, Oz Housing

By Glenn Dyer | More Articles by Glenn Dyer

A big week here and offshore – the start of a new week, a new month, a new quarter, a new half year and for most Australian companies, a new financial year – 2018-19.

In the US there’s the usual jobs report for the month before, plus start of month data – the same in Europe and other economies such as Australia.

As well the China-US trade brawl won’t go away and the results of the Mexican Presidential poll yesterday will be a major headache for the US and President Trump.

The new President – elect is a leftwing populist, named Andrés Manuel López Obrador who won’t be the soft pushover that his predecessor seemed to be at times and will take on the Trump bullying, especially on the question of a wall.

As well start of month surveys for manufacturing and services for the world’s major economies will be released from today onwards.

Here in Australia its all about the economy.

The Reserve Bank will keep the cash rate on hold for a 23rd month in a row at its meeting tomorrow.

Economists don’t see any chance of a rate rise, especially how the RBA and governor, Phil Lowe have made it clear they see no need for a rate rise for some time to come – possibly another year or more.

Some loud mouths (including the Financial Review) are calling for a rate rise, but the RBA and most economists reject that.

For example the AMP’s Chief Economist, Dr Shane Oliver again wrote at the weekend “We remain of the view that a rate hike is unlikely before 2020 at the earliest and can’t rule out the next move being a cut.”

On the data front house prices for June, the June quarter, half year and financial year will be out later today from CoreLogic data for June. May building approvals are out tomorrow and May retail sales and the trade surplus are to be issued on Wednesday.

June business conditions survey results are out today, while car sales figures for June, the June quarter, the June half year and the 2017-18 financial year will be released later in the week.

Offshore, the proposed 25% US tariffs on $US34 billion of Chinese imports are scheduled to start being levied on Friday – absent a last minute re-start of US/China trade talks.

That’s two days after the July 4 US Independence Day celebrations which this year will be all about President Trump. US markets will be shut that day. President Trump’s Chief of Staff, General John Kelly could reveal his departure this week (he’s a tip to be ambassador to Australia).

Friday sees the release of the June jobs report for the US – it is likely to show a 190,000 gain in payrolls (against 223,000 in May), unemployment staying at 3.8% and wages growth ticking up slightly to 2.8% year on year.

The start of month surveys of US manufacturing and services will both be issued this week and are expected to show the economy is travelling much better than the 2% rise in GDP revealed in the third estimate for the March quarter released late last week.

The minutes from the last US Federal Reserve meeting are out on Thursday and Dr Oliver says they are likely to just reaffirm that the Fed sees itself as on track for two more rate hikes this year but will be watched to see how concerned the Fed is about the risks to global trade.

Eurozone unemployment data tonight, our time for May is likely to show a slight fall to 8.4%.

In Britain the UK government’s cabinet is due to meet on Friday (July 6) to discuss the finalisation of a white paper on Brexit and the shape of the departure. It could provoke a brawl with several ministers threatening to quit.

In Japan the quarterly Tankan business conditions index from the Bank of Japan is out later today and is expected to remain reasonably strong but will be watched for trade war worries and household spending data will be released Friday.

In China the monthly Government’s survey of large manufacturing company activity dipped in June.

The manufacturing purchasing managers index eased to 51.5 in June, from 51.9 in May.

But the non-manufacturing PMI, covering services and construction, rose to 55, China’s National Statistics Bureau said Saturday, compared with 54.9 in May. Readings above 50 indicate expansion.

The private business conditions survey will be released today.

In Russia the World Cup’s round of 16 knockout phase continues (it started Sunday night, our time) and the quarter finals will be at week’s end.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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