Savanth Sebastian – Economist – CommSec

Autumn avalanche

• The seasons are changing. So this means that investors can expect another barrage of economic data to be released in Australia. Welcome to the autumn avalanche where a dozen economic events are scheduled over the coming fortnight.

• The week kicks off on Monday with the release of the Business Indicators publication from the Bureau of Statistics (ABS). The publication contains estimates on profits, sales, wages and inventories.

• On Tuesday, the quarterly Balance of Payments data is issued – the broadest measure of our trading performance. The estimate of net exports plugs straight into the calculation of economic growth for the quarter.

• Similarly the government finance data on Tuesday gives an idea of how much the government sector contributed to economic growth in the quarter.

• Private sector credit (effectively outstanding loans) figures are also released on Tuesday. Business loans are at record highs with firms taking on more debt at current low interest rates.

• Also on Tuesday the weekly consumer confidence data is released. Consumer sentiment eased by 2.3 per cent last week.

• On Wednesday, the ABS releases the National Accounts publication which includes the latest estimates of economic growth. The economy went backwards in the September quarter in response to myriad influences. The UK Brexit vote, Federal Election and US Presidential election caused consumers and businesses to delay spending, investing and employing. And poor weather lead to delays in construction work.

• We expect that the economy bounced back in the December quarter, growing as much as 1 per cent after the previous sector’s fall of 0.5 per cent.

• Also on Wednesday, Corelogic releases its estimates of home prices for February. By all accounts home prices are continuing lift in response to firm demand.

• On Thursday, the ABS will release the January estimates of international trade (exports and imports) together with estimates of building approvals for the same month.

• On Friday the Federal Chamber of Automotive Industries releases February data on new vehicle sales. We are edging closer to the point where sports utility vehicles outnumber cars.

US housing sector under the spotlight

• In the US, there is no standout indicator to be released over the week. But both US and China will issue gauges of activity in manufacturing and services sectors.

• The week kicks off on Monday with the release of US data on durable goods orders – goods that are meant to last three years or more like cars and aircraft. And on the same day the US pending home sales index is issued.

• On Tuesday, the second estimate of US economic growth for the December quarter is issued. Economists expect the growth estimate to be upgraded from 1.9 per cent to a 2.1 per cent annual pace.

• Also on Tuesday data is released on home prices (from CaseShiller) and consumer confidence and the activity gauges or surveys from Chicago, and regional Federal Reserve regions of Richmond and Texas. The usual weekly data on chain store sales is also issued.

• On Wednesday in the US, data on personal income and spending is released for January. Apart from the estimates of income and consumption growth, investors will closely watch the inflation measure from the spending series (core private consumption deflator).

• Also on Wednesday the ISM gauge of manufacturing activity is released with construction spending data.

• On Thursday, the Challenger series of job layoffs is released in the US together with the usual weekly data on new claims for unemployment insurance (jobless claims).

• And on Friday, the US ISM services gauge is released with estimates on new vehicle sales during February.

• In China, gauges on manufacturing and services sector activity are slated for Wednesday and Friday.

Sharemarkets, interest rates, exchange rates and commodities

• The Australian profit reporting season grinds to a close on Monday and Tuesday.

• On Monday, earnings results include those from QBE Insurance, Harvey Norman, Lend Lease, Village Roadshow, Vocus Group and Bellamy’s.

• Amongst those expected to report earnings on Tuesday are AWE Ltd, Beadell Resources, Select Harvests and Boart Longyear.

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