The coming week could see a possible deal between the US and China over their trade war, better news about the US economy and will the Reserve Bank cut rates at its November meeting tomorrow.
For local investors, the annual results of Westpac (today) and the NAB on Thursday will be the major events, and the October trade data from China on Friday will come too late for local markets.
The Reserve Bank meeting and then a slew of important economic reports dominate the week here (See separate story).
The RBA is likely to leave rates on hold at a record low of 0.75% at its board meeting on Tuesday.
Tomorrow’s board meeting will consider RBA’s quarterly Statement on Monetary Policy which will be released on Friday and the AMP’s Dr. Shane Oliver says the report “is likely to see yet another downgrade to its growth forecasts as June quarter GDP growth came in weaker than expected and its inflation forecasts for this year are also likely to be lowered again.”
As well there will be some important data – September retail sales to be released today (a forecast rise of 0.3%), a fall in February’s trade surplus on Thursday) and a further rise in housing finance commitments on Friday around 1.2%. car sales for October are also due for release and will show another month of weakness.
After the ANZ last week cut the level of franking (to 70%) for its final dividend, analysts think there’s a good chance Westpac (this morning) and the NAB (on Thursday) will either follow suit or cut their final dividend but maintain 100% franking.
In the US more data this week is expected to confirm the economy is nowhere near recession, despite last week’s third rate cut from the Fed.
Friday’s solid jobs report confirmed the underlying strength of the economy and data to be released tomorrow is expected to show an improvement in the non-manufacturing business conditions for October and along with a slight decline in September’s trade deficit.
Data on job openings and hiring will be released the same day.
September quarter corporate earnings results will also continue to flow with media and travel companies dominated (See separate story).
Chinese trade data for October will be out on Friday and is expected to show continuing softness in imports and exports.
China’s producer and consumer inflation data will be out on Saturday and is expected to show a further lift in headline inflation thanks to African swine fever, but core inflation is likely to remain soft at 1.5% year on year and producer price inflation is likely to remain negative.