It should be a quieter week globally, though, with Brexit still unresolved and increasingly intractable and the US government about to freeze in the midst of a hail of legal activity over Donald Trump’s attempts to fund his wall by a calling a state of emergency, anything can happen.
The US-China trade talks will continue in Washington on Wednesday after the sixth round of cabinet-level negotiations ended in Beijing on Friday with no sign of substantial progress.
That issue will be the major influence towards the end of the week.
The talks come after US president Donald Trump insisted far-reaching structural economic reforms had to be part of any “real deal” to end the trade war. The deadlock has raised pressure on Mr. Trump to delay the start of new, higher tariffs on $US200 billion of Chinese imports.
Earnings seasons in Australia, the US, and Europe will dominate much of the week, with minutes from the last meeting of the Reserve Bank and the US Federal Reserve will be looked at for any more signs from the change in monetary policy stances both meetings produced.
In the US the minutes from the Fed’s last meeting on Thursday will confirm that the Fed remains confident but that it is waiting ‘patiently’ to see how the economy is traveling – the 1.2% slump in retail sales in December has been a shock to a lot of analysts and investors.
US data this week is mostly second and third tier in importance – a homebuilders’ conditions index, durable goods orders, business conditions PMIs for February and existing home sales.
In the Eurozone, the focus will be on whether the business conditions PMI on Thursday.
The surprise April 28 Spanish election campaign kicks off, tensions over Brexit will continue to rise in the UK and EU and the Italian recession will generate angst.
Japanese inflation data for January is out and won’t show any signs of life
In Australia, the minutes from the last RBA board meeting tomorrow will confirm the shift to a neutral bias in terms of the immediate outlook for interest rates and Governor Lowe’s parliamentary testimony on Friday will be watched for further clues in terms of how the RBA is seeing the outlook for the economy.
On the data front, the December quarter wages growth on Wednesday is expected to hold around 0.6% quarter on quarter or 2.3% year on year as the lift in the minimum wage increase to 3.5% continues to feed through.
The AMP’s Dr. Shane Oliver says January jobs data is expected to show a 5,000 gain in employment and a rise in unemployment to 5.1%. Data for skilled vacancies and the February business conditions surveys will also be released.
The Australian December half earnings results season will see its busiest week with 70 major companies reporting (See separate story).