Brexit, the fallout from the weekend’s G20 meeting in Argentina (and Donald Trump’s latest atrocity), an EU meeting on Sunday on Brexit, US interest rates, sliding oil prices, weak sharemarkets and the usual end of month statistics releases will dominate the week here and offshore.
In Australia, we start the run-up to the release of the September quarter GDP data next week, and the final Reserve Bank board meeting for the year tomorrow week.
The June 30 annual meeting season ends this week. This week sees two meetings of July balancing companies – Myer shareholders meet on Friday, the day after Premier Investments holds its meeting, also in Melbourne where chair, Solomon Lew is expected to renew hostilities with Myer.
Other (June 30) meetings include Harvey Norman, Lynas Corp, Seek and Afterpay Touch. Earnings results are expected from Fisher & Paykel Healthcare, Collins Foods, and Aristocrat Leisure.
Elsewhere there are speeches by RBA Governor Lowe and Assistant Governor Kent later today which will be watched for any clues on rates.
On the data front construction data for the September quarter on Wednesday is expected to be solid and the AMP’s chief economist, Shane Oliver says we could see a 1.5% gain in September quarter business investment on Thursday), but the data to watch from the release will be the latest update on investment planned for this financial year.
The Reserve Bank releases October credit growth data on Friday with ongoing weakness in lending to property and share investors. Watch also to see if the recent rise in business lending continues.
The last week of public hearings of the banking and finance royal commission starts in Melbourne today. CEO’s and possibly company chairs from National Australia Bank, AMP, ANZ, Bendigo and Adelaide Bank and the regulator, Australian Prudential Regulation Authority.
The planned meeting between US President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 leader’s meeting in Argentina didn’t bring any real benefits.
Elsewhere in the US this week the minutes from the last Fed meeting are out on Thursday and a host of Fed members are due to speak this week in what appears to be a concerted effort to shape the economic narrative.
Members including Chair Jay Powell, Atlanta Fed president Raphael Bostic, Cleveland Fed president Loretta Mester, and New York Fed president John Williams are down to speak.
With the release of the Fed minutes the November meeting left rates unchanged but signaled it was on course for a rate rise in December, the speeches will be watched closely, especially for any references to the impact of the slide in the oil price and its impact on the US economy and on financial markets.
The yield on the key US 10 year bond peaked in early October above 3.26% and on Friday ended around 3.04% and if the slide in oil and other commodity prices continues, could very well dip under 3% in the next week to 10 days.
The Fed recently said it will launch a sweeping assessment of its policy tools and the way in which it communicates its decisions next year and the minutes could reveal Fed members’ thinking on the subject.
The second estimate of US third-quarter GDP on Wednesday night is expected to show the US economy expanded at an annual rate of 3.6% against the first estimate of 3.5%.
This week also sees the release of the latest data on personal consumption expenditure, the Fed’s preferred inflation measure.
The EU leaders meeting endorsed the terms of the UK’s departure deal from the Union, now its back to Britain for what could be a climatic political brawl and parliamentary vote.
Part of that will be the Bank of England analysis of the draft deal to the UK Commons Treasury select committee on Thursday. The Bank report is expected to include an analysis of how monetary and financial stability in the UK would be affected by if Britain leaves the EU without a transition deal.
Eurozone economic confidence for November on Wednesday will be watched for any stabilisation after several months of softness, unemployment for October (Friday) is likely to be unchanged at 8.1% and core inflation for November (also due Friday) is likely to be unchanged at 1.1% year on year, according to Dr. Oliver.
Japanese data to be released Friday is likely to show continuing labour market strength helped by a falling population but industrial production is likely to show a bounce.
Chinese business conditions PMIs for November will be released Friday and over the weekend with the focus likely to be on the manufacturing PMI which has been slowing lately.
Elsewhere in Asia South Korea decides on monetary policy amid increasing concerns over financial imbalances, and India publishes second quarter (September) GDP. Other data highlights for the Asia region include Hong Kong’s trade numbers, as well as China’s industrial profits and Thailand’s GDP data.