The Week Ahead With Stephen Koukoulas

The local highlight will be a speech from RBA Governor Phillip Lowe at the Australia-China Relations Institute. While the focus will no doubt be on Australia’s export dependence on China and the benefits of trade to both countries, Lowe is also likely to discuss some of the recent economic news which shows entrenched low inflation and a softening outlook for the world economy.

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The Week Ahead With Stephen Koukoulas

Treasurer Scott Morrison will deliver the 2018-19 Budget on Tuesday night and from all accounts a range of upbeat economic forecasts will deliver a deluge of revenue that will fund income and company tax cuts and leave the budget on track for a small surplus in 2020-21. These issues, tax cuts, economic forecasts and the return to surplus, are likely to be the main aspects of the budget.

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Stephen Koukoulas – The Week Ahead

With the health of the labour market front and centre of the debate over the economy and the outlook for official interest rates, next week’s job vacancy data will shed more light on the demand for labour. Since the low point in 2013, the number of job vacancies has been trending higher, albeit as a moderate pace. The market consensus is for another moderate rise in the number of job vacancies, even though the hard data on economic growth has been generally disappointing since the start of the year.

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Stephen Koukoulas – US Inflation In Focus

All eyes will be on the US inflation data as it will help frame expectations for interest rate hikes from the US Federal Reserve. With a further 25 basis point rate hike all but fully priced in to the next Fed meeting on 21 March, the inflation data will help form views on how many interest rate hikes will be needed in 2018 to ensure the pace of economic growth is consistent with the target.

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Stephen Koukoulas – European Central Bank

The European Central Bank meets this coming Thursday and while no one expects any change in monetary policy settings, the sharp and increasingly broad based pick up in economic activity is likely to see at least some commentary cover this increasingly favourable news. Some in the market are looking for the ECB to discuss the timetable for starting to reverse the super-stimulatory stance of policy.

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Stephen Koukoulas – China Inflation

The 19th National Congress of the Communist Party of China is being held amid a week where there is a torrent of data on the Chinese economy. In terms of the economy, the National Congress is likely to keep a focus on economic and financial stability whilst ensuring the risks from financial pressures linked to risks in the banking and property sectors are carefully monitored and managed.

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Stephen Koukoulas – Housing Finance

With the eyes of the Reserve Bank firmly on the housing market, the release of the housing finance data will be scrutinised for more clues on the extent of the cooling in demand for housing. Over recent months, there has been a cooling in housing finance growth as a mix of tighter regulation, a lift in mortgage rates for investors and a more general souring in mood towards housing have all impacted.

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Stephen Koukoulas – Labour Force Data

The labour force release will dominate the Australian data calendar next week with the highlights being the estimates of spare capacity in the labour market. The key points will be the rate of unemployment (currently stuck around 5.5 to 5.75%), the underemployment rate (currently around 8.5 to 9 per cent) and, linked to those, the momentum in jobs growth in both full-time and part-time work.

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Stephen Koukoulas – All Eyes On Jackson Hole

The world’s central bankers and a plethora of economists will gather at Jackson Hole, Wyoming, USA, for an annual get together with the topic this year, “Fostering a Dynamic Global Economy”. While that is an important topic as the world continues to lurch unevenly from the global crisis which started 10 years ago, the market will be looking at the speeches and discussion for clues on monetary policy settings.

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