Diary: Oz Business Spending, EU Elections, US Growth

By Glenn Dyer | More Articles by Glenn Dyer

In Australia we start the run-up to next week’s doubleheader – the Reserve Bank board meeting on Tuesday, June 4 and the release of the March quarter National Accounts and GDP figures the day after.

To that end, the March quarter business investment on Thursday will a key figure for the GDP report and economists expect it to have remained weak in the three months to March.

But they also expect business investment plans for 2019-20 are likely to show further modest improvement.

Building approvals for April are also out on Thursday and are forecast to show a small rise, while private credit data from the Reserve Bank on Friday will again be soft, especially for housing.

Fisher & Paykel Healthcare, Mesoblast, and Select Harvests are due to report earnings.

There are only a few meetings – Galaxy Resources, Costa Group, FAR Ltd, and Sundance Energy.

In the US it will be the second estimate of March quarter growth that will hold attention for investors later in the week.

After more data last week suggesting the US economy is slowing, traders are starting to fret about the pace of activity in the economy, especially with the continuing trade war with China raising costs and hitting demand.

Besides the GDP data on Thursday night, our time there’s will also be consumer confidence data, pending home sales figures and the important consumer spending and prices figures that the Fed closely watch – the personal Consumption and Expenditure (and prices) reports on Friday.

So-called PCE inflation is the key datapoint watched by the Fed and markets and it is expected to ease again to around 1.6% annual, well under the 2% inflation target of the Federal Reserve.

There’s only a handful of quarterly financial results to be issued – discount retailer, Costco, plus smaller rival Dollar General and clothing chains, Gap and Abercombie and Fitch.

In Europe (and the UK) the winners of the European parliamentary elections will be known. There will be the usual hype about populists do well (though no in the Netherlands where early results have shown the Labour Party doing well).

The AMP’s Chief Economist, Dr. Shane Oliver says “the EU elections tend to see a higher turnout from motivated Eurosceptic voters, most Eurosceptic parties are not serious about leaving the EU and/or the Euro (the Italians and Eastern Europeans) or are irrelevant (those from the UK). “

“The EU Parliament doesn’t have a lot of power and in any case, popular support for the Euro across the Eurozone has been rising and is strong at 75%,” according to Dr. Oliver.

Britain meanwhile sees more of the same – continuing Brexit-driven confusion with the Conservative Party riven by leadership plays.

In Asia Japanese data to be released, Friday is likely to show a continuing tight labour market thanks partly to the falling workforce but industrial production data will be watched for a rebound after recent weakness. The Japanese government downgraded its view of the economy on Friday

In China, the usual business conditions surveys for May on Friday for May (Friday) will be watched for any further weakness after the surprise easings in April.

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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