Another busy week with more COVID-19 cases, especially in Europe and the US, Victoria reborn, again, NZ settles for another three years, more US earnings and the third Presidential debate (at this stage) but before all that, a timely update on China’s recovery.
Today will see the extent of the rebound in China’s economy with the release of the September quarter GDP numbers.
For Australia, it will be news that will confirm our biggest market remains solid.
On top of the GDP data, figures on industrial production for September and the first nine months of the year will be issued, along with retail sales and urban investment.
IHS Markit estimates China’s economy to have grown at a 5.9% annual rate in the three months to September, up from 3.1% in the June quarter.
“Recent data indicated a broad-based recovery on both the supply and demand sides,”IHS Markit economists wrote at the weekend.
Data from IHS Markit “saw a strong end to the third quarter for the Chinese economy, with the average PMI reading of 54.7 in the third quarter above the 52.6 in the second quarter,” the economists wrote.
A sustained recovery will add to views that the mainland Chinese authorities have no need for additional stimulus measures
The AMP’s Dr. Shane Oliver sees China’s third-quarter GDP rising 3.3% quarter on quarter after the 11.5% quarter on quarter in the three months to June (for the annual rate of 3.1%).
“This would take annual growth to 5.4% year on year,” he wrote at the weekend..
“September data is also likely to show a further acceleration in growth in industrial production to 5.8% annual and with retail sales growth picking up to 2% annual.
In Australia, the minutes from the last RBA meeting are out tomorrow but are dated because of the speech last week by Reserve Bank governor Philip Lowe revealed a big change in monetary policy and all but confirmed a rate cut on the first Tuesday in November.
RBA Deputy Governor Debelle speaks on Thursday and like last week’s contribution from his boss. Debelle’s speech will be watched for any clues regarding future monetary easing but the Deputy Governor’s speech will address the new global interest rate code for foreign exchange trading and pricing.
On the data front payroll jobs data for up till October 3 will be released tomorrow and will be watched for signs of further improvement, preliminary retail sales data for September will be out on Wednesday are likely to show only a small rise after August’s 4.2% fall and the CBA’s business conditions PMIs for October (Friday) are expected to improve.
While there will be a few company AGMs this week but the news flow will be dominated by September quarter production, sales, and exploration reports from companies such as BHP, Woodside, OZ Minerals, Santos, and Oil Search.
At the end of this week, the AFL and NRL grand finals will be played in Sydney and Brisbane respectively.
In the US, COVID and the November 3 election campaign dominate with the third and final Presidential debate to be held on Thursday and the virus continues to be the big story with US infections now topping 70,000 a day.
There’s new data on home builders’ conditions, housing starts (Tuesday), and existing home sales (Thursday) with the composite business conditions activity index for October out on Friday.
September quarter earnings reports will start to ramp up (See separate story).
Besides Australia and the US, the composite business activity surveys will also be released for the Eurozone and Japan and the UK.
The AMP’s Dr. Oliver says Japan’s business conditions PMI for October is likely to show a further recovery and core inflation for September is expected to remain around -0.1%yoy (both due Friday).
He says Eurozone’s composite business conditions PMI for October (also out on Friday) is expected to fall slightly from September’s reading of 50.4 reflecting the second wave of coronavirus cases.