Apart from the Reserve Bank board meeting and a slew of figures starting with the December quarter growth figures in Australia, the February jobs report from the US is the most important event this week for markets outside Australia – unless Donald Trump and China resolve the trade war, or decide to prolong the pain through disagreement.
Central banks will also dominate the week – there’s the Reserve Bank’s monthly meeting tomorrow, but more important will be the Thursday meeting of the European Central Bank, while the bank of Canada also meetings.
The Bank of England releases minutes from its last meeting and the Federal Reserve releases its Beige Book of reports from its operating districts.
US analysts are looking for 180,000 new jobs in Friday’s report (304,000 in January) and a jobless rate of 4% (3.9% in January). The January reading could see a large revision given the partial government shutdown.
Wage data will be of particular interest with the Fed’s favoured inflation measure at 1.9% a year, short again of the 2% target. Average hourly earnings in January were up just 0.1% compared with the prior month, the weakest rate of growth since October 2017.
Other US economic data include new home sales on Tuesday and housing starts on Friday (both expected to be weak) and the monthly survey of services activity (expected to slide, like the manufacturing index last week).
On Wednesday, the Federal Reserve will release its monthly Beige Book, an anecdotal look at business activity across the central bank’s 12 districts.
US corporate earnings for the December quarter are fading – 96% of the companies on the S&P 500 have released their reports.
The spate of retail earnings will continue this week. Target and Kohl’s, the American department store chains, will release their fourth-quarter financial results on Tuesday. Discount retailer Dollar Tree, grocery chain Kroger, bookseller Barnes & Noble and warehouse outlets Costco and BJ’s Wholesale Club.
Other US retailers stores such as Walmart, Best Buy and Macy’s have already disclosed fourth-quarter profits and sales. Walmart and Best Buy did better than expected, Macy’s was weak. Quarterly reports will also come from Salesforce.com and booze group, Brown-Forman.
The European Central Bank is expected to hold rates steady as the EU economies weaken. President, Mario Draghi will speak at a press conference on Thursday.
The AMP’s chief economist, Shane Oliver believes the ECB will announce another round of cheap financing to try and soften the weakening EU economies.
Other data from the EU includes Italian GDP (will be very weak), German factor orders while the Bank of England minutes will be examined for the central bank’s views on the looming Brexit decision on March 29 and how well the UK economy is prepared.
In the US, New York Fed president John Williams and Cleveland Fed President Loretta Mester will be among the central bank officials to give remarks.
China is expected to announce an economic growth target as its annual National People’s Congress begins in Beijing (65 to 6.5% is the range Reuters reported late last year will be the target). Chinese trade and inflation data for February will be out on Friday and Saturday of this week. Trade especially will be disrupted by the week-long Lunar New Year holidays.
In Australia the RBA will leave rates on hold tomorrow; on Wednesday the national accounts will show GDP around 0.2% quarter on quarter says Dr. Oliver and 2.4% for the year.
Today sees the release of figures on wages and salaries, business stocks and sales in the December quarter, tomorrow sees the current account and government finance data and Wednesday sees the national accounts.
At the same time, January figures for building approvals (today) and retail sales and trade (Thursday) will be issued. Dr. Oliver sees a small rise in approvals and a 0.4% rise for retail sales after December’s weakness and a lower trade surplus of around $2.5 billion.
The Australian December half and full year reporting season has ended. This week sees the January balancing department store chain, Myer release its figures on Wednesday. It should make for interesting reading given the company’s managerial and board changes and adoption of a different strategy.
