Lending data and jobs in focus
· Another busy week lies ahead with around eight key economic indicators to be released in Australia.
· The week kicks off in Australia on Monday with the October data on job advertisements from ANZ while on the same day the Australian Bureau of Statistics (ABS) releases figures on tourism arrivals and departures.
· In September Australian businesses posted more than 150,000 employment opportunities, up 3.9 per cent on the month and the biggest monthly increase in 15 months.
· On Tuesday, data on new home loans (housing finance) is released by the ABS while National Australia Bank issues its October business survey.
· The number of loans taken out by people wanting to live in homes – as opposed to buying as an investment – may have eased by 1 per cent in September.
· Also on Tuesday the weekly ANZ/Roy Morgan consumer confidence survey is released.
· Another check on consumer sentiment will occur on Wednesday with the monthly survey from Westpac and the Melbourne Institute.
· On Thursday the October employment report is issued – probably the highlight in a busy week. In September just over 5,000 jobs were lost but we expect that employment rebounded in October, lifting by 20,000. The jobless rate was probably steady at 6.2 per cent.
· Also on Thursday the Reserve Bank will release the monthly data on credit and debit card lending.
· And on Friday the broader lending figures are released by the ABS. This data covers personal, housing, business and lease loans.
Chinese data in focus
· The ‘top shelf’ US economic indicators don’t occur until Friday. So the early part of the week will be spent analysing the Chinese ‘top shelf’ indicators.
· The week kicks off on Sunday (November 8) in China when data on exports and imports is released. Imports are down 20.4 per cent over the year but this reflects lower commodity prices as well as some softness in demand. Exports in August were down 3.7 per cent over the year.
· In the US, the week kicks off on Monday with the employment trends report. But on Tuesday a number of ‘second tier’ indicators are slated for release. These include the NFIB business optimism survey (survey of small business), export and import prices, wholesale sales and inventories and the weekly data on chain store sales.
· In China on Tuesday, the October inflation data is issued – producer (business) prices and consumer prices. With consumer prices up just 1.6 per cent over the year, there is scope for China to further cut interest rates.
· On Wednesday in China, there is the monthly ‘download’ of activity data – figures on retail sales, production and investment. Real retail spending is growing at a double-digit annual rate.
· On Wednesday in the US, the usual weekly report on mortgage transactions – purchases and refinancing – is scheduled. While on Thursday the monthly budget figures are released with the JOLTS job openings series and the usual weekly data on claims for unemployment insurance.
· And on Friday, finally there is some ‘top shelf’ data to monitor in the US. October readings on producer prices (business inflation) are released with retail sales. There are also the preliminary consumer sentiment figures to watch.
· Economists expect that core producer prices (excludes food and energy) probably rose just 0.1 per cent in October with the annual rate near 0.8 per cent. Meanwhile retail sales (excluding cars and gasoline) may have lifted by a healthy 0.4 per cent in October.
Sharemarkets, interest rates, commodities & currencies
· Longer term interest rates have lifted, pushing up to around the highest levels in six weeks. There are two reasons for this. There are increasing expectations that the Federal Reserve will start the “normalisation” process – lift interest rates – in mid-December. And the second factor is that investors and analysts alike are giving up on an interest rate cut in Australia any time soon.
· According to Thomson Reuters I/B/E/S, US companies have posted stronger-than-expected quarterly results in general so far this earnings season. So far around 379 of the S&P 500 companies have reported results, 70 percent beat profit estimates, compared with 63 percent in a typical quarter.
· At the start of the earnings or profit-reporting season, analysts had tipped a 4.9 per cent annual fall in earnings from S&P 500 companies. So far, Reuters report that earnings have fallen by only 1.5 per cent.
· There is just over 11?2 months to go until the end of the year. So it is a good time to track how global sharemarkets have fared so far in 2015. Of 73 global sharemarkets or bourses assessed, 36 are up over the year – or a touch under half.
· The biggest gains have been recorded in Venezuela (up 195 per cent) followed by Argentina (up 49 per cent) and Latvia (up 46 per cent). Weakest markets are Ukraine (down 29 per cent), Peru (down 28 per cent) and Kenya (down 25 per cent).
· The Australian sharemarket is in 41st place, down around 2 per cent over the year. In US dollar terms, Australian shares are down closer to 18 per cent.