Craig James – Chief Economist – CommSec

Quiet week ahead in Australia
·       There are no ‘top shelf’ indicators due for release in Australia in the coming week.
·       In Australia, the week kicks off on Monday with the release of the Business Sales index (BSI) from Commonwealth Bank. Unlike the retail trade figures from the Australian Bureau of Statistics (ABS), the BSI is a measure of economy-wide spending, including spending by government and business and including industries like airlines and automotive.
·       On Tuesday the Reserve Bank releases minutes of the Board meeting held on March 7. Investors and analysts always want as much guidance from the Reserve Bank as possible on interest rate settings and the outlook for sectors like housing. So the Board minutes will be scrutinised for clues on the policy bias.
·       In terms of economic data, the ABS releases figures on residential property prices on Tuesday. The figures may be perceived as a bit dated, being for the December quarter, but there are also estimates of the number of homes and the average number of people per household.
·       Also on Tuesday, Roy Morgan and ANZ release the weekly consumer confidence reading. Confidence is good without being great.
·       The Reserve Bank Assistant Governor (Economic), Luci Ellis, speaks on Tuesday at the launch of the ACT Women in Economic Network in Canberra.
·       On Wednesday there is another speech from a Reserve Bank official, this time from Deputy Governor Guy Debelle. The Deputy Governor addresses the TradeTech FX Asia conference in Singapore.
·       On Thursday, arguably the most interesting data for the week is published. The ABS will release the publication, “Australian Demographic Statistics”, a publication containing population estimates for the September quarter. Australia’s population is growing at a 1.4 per cent annual rate – one of the fastest growth rates for advanced economies.
·       Also on Thursday the ABS releases detailed data on the job market. The February data will include quarterly estimates of employment by industry, with the surprise in 2016 being the sharp lift in job numbers at manufacturing businesses.
Quiet times also in the US and China
·        Just like in Australia, US analysts and investors will also struggle to get fresh guidance on the economic outlook in the coming week.
·        The week kicks off on Monday with the release of the National Activity Index in the US. But also on Monday investors will have the first opportunity to react to Chinese data on house prices – released on Saturday. In the year to January, home prices were up 12.2 per cent on a year ago.
·        On Tuesday in the US, the broadest measure of the trade or external position of the US will be released – the quarterly current account data. A current account deficit of US$113 billion was recorded in the September quarter. Also on Tuesday the usual weekly data on chain store sales is issued.
·        On Wednesday in the US, the spotlight shines on the housing sector. The Federal Housing Finance Agency (FHFA) issues the monthly home price report with latest data showing that prices recorded a solid 6.2 per cent gain for the year to December.
·        Also on Wednesday, data on existing home sales is issued. In January, sales recorded a healthy increase of 3.3 per cent to a 5.69 million annual rate. Economists are looking for some of the gain to be handed back, with a 2 per cent fall expected in February. The usual weekly data on housing finance will also be issued on Wednesday.
·        On Thursday in the US the usual weekly data on jobless claims is released alongside new home sales and the Kansas City Federal Reserve survey on the manufacturing sector. New home sales were up 3.7 per cent in February and economists tip consolidation near a 559,000 annual rate in February.
·        Also on Thursday, Federal Reserve Chair Janet Yellen delivers a speech. Other district Federal Reserve Presidents deliver speeches on Monday, Tuesday, Thursday and Friday.
·        And on Friday in the US the February data on durable goods orders is released. Durable goods are things like cars and aircraft – goods that have a shelf life longer than three years. Generally durable goods orders are seen as a gauge on business investment. Orders may have lifted 1.5 per cent in February after a 2 per cent increase in January.
·        Also on Friday the Markit organisation issues “flash” readings on manufacturing activity in the US, Japan and Europe.
Sharemarkets, interest rates, exchange rates and commodities
·        The first quarter of 2017 is drawing to a close. And the interesting point is that the Aussie dollar is one of the strongest currencies in 2017 when measured against the greenback. The Aussie dollar has lifted by 6.3 per cent against the US dollar (measured as units of currency per US dollar) since the start of the year – the fifth strongest currency of 120 currencies monitored.
·        The Malagasy ariary has been the strongest currency, gaining 9.7 per cent against the US dollar with currencies of countries like Mexico, Israel, South Africa, South Korea and Taiwan amongst the biggest gainers.
·        The UK pound has lost 0.4 per cent against the US dollar with currencies of countries such as Ghana, Turkey and the Philippines amongst those to have weakened most this year.
·        Of the other major currencies, the Japanese yen has gained around 3 per cent with the Euro up 2 per cent.

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