Craig James – Chief Economist – CommSec

Bevy of indicators set for release
·       In Australia over the coming week, a bevy of indicators are set for release covering confidence levels, business conditions and lending. The testimony of the Reserve Bank Governor to the House of Representatives Economics committee on Friday is one of the highlights.
·       The week kicks off on Monday with the release of job advertisements data – a key leading indicator of the job market. Job advertisements rose by 2.7 per cent in June to 175,091 ads – a near 6½-year high. Advertisements have been volatile in the past five months but are still up 10.5 per cent on a year ago. And while jobs are now filled through a variety of mechanisms, the job ads data remains instructive.
·       Also on Monday there is a Bank Holiday in NSW.
·       On Tuesday, NAB releases its July business survey. The business conditions index rose from +10.9 points to a 9½-year high of +15.1 points in June (long-term average +5.1 points). The business confidence index rose from +7.5 points to +9.3 points (long-term average +5.8 points).
·       Also on Tuesday, the weekly consumer confidence data from ANZ and Roy Morgan is issued. Consumer spirits have recently been buoyed by the firmer Aussie dollar – raising the appeal of foreign travel and overseas purchases.
·       On Wednesday, the Australian Bureau of Statistics (ABS) issues the June data on home loans. The number of loans (commitments) for budding home owners (owner-occupiers) rose by 1.0 per cent in May. And the value of all home loans rose by 1.3 per cent in the month.
·       Based on the Bankers Association data, the number of loans may have lifted 3 per cent with the value of loans up 1 per cent. Still, it is important to track the loans actually advanced as cancellations have been rising.
·       Also on Wednesday, Westpac and the Melbourne Institute issue the August monthly consumer confidence index. This release is more a check on the weekly confidence survey results.
·       The Reserve Bank’s Assistant Governor (Financial Markets), Christopher Kent, also delivers a speech on Wednesday at The Bloomberg Address.
·       On Friday, the ABS releases the lending finance data for June. These statistics cover housing, personal, commercial and lease finance commitments – in other words, the broadest measure of new lending in the economy. Total new lending commitments fell by 3.1 per cent in May to a 3-month low. Commitments were down 0.5 per cent over the year. Personal loans were especially weak, down 18.4 per cent on a year ago. In trend terms personal loans were at 14½-year lows.
·       Also on Friday the Reserve Bank Governor, Philip Lowe, faces his customary bi-annual grilling from members of the House of Representatives Economics Committee. Depending on the quality of questions posed, the testimony could provide investors with great insights on the direction for monetary policy.
US and Chinese data share equal billing
·        There is a good array of both Chinese and US economic data in the coming week with the spotlight largely focussed on inflation.
·        In the US, the week begins on Monday with the release of the consumer credit figures – a key measure of household borrowing. In May, consumer credit rose by $18.4 billion – the biggest lift in six months.
·        On Tuesday in the US, the National Federation of Independent Business releases its July survey of small business optimism. And on the same day the JOLTS job openings data for June is issued together with the weekly survey of chain store sales.
·        In China on Tuesday the July international trade data is released. In June both exports and imports rose at a healthy annual rate. Exports were up 11.3 per cent with imports up 17.2 per cent.
·        In China on Wednesday, the July data on consumer and producer prices are released. Producer prices are up 5.5 per cent on a year ago but are off recent highs. Meanwhile consumer inflation is being restrained by softer food prices. Non-food inflation actually stands at 2.2 per cent – a little higher than in other major advanced nations.
·        In the US the quarterly data on labour costs and productivity is released on Wednesday.
·        On Thursday, July data on producer prices is released with the weekly data on new claims for unemployment insurance. Economists are tipping a 0.2 per cent rise in the core measure of prices (excludes food and energy), keeping the annual rate near 2 per cent.
·        And on Friday the July data on consumer prices is released. Similar to producer prices, a 0.2 per cent lift in core consumer prices is expected.
Sharemarket, interest rates, currencies & commodities
·        The Australian earnings season cranks up a notch in the coming week. Amongst companies reporting results: SCA Property Group, Transurban, James Hardie and IOOF (Tuesday);, Skycity Entertainment and Commonwealth Bank (Wednesday); AMP, AGL Energy and Magellan Financial Group, Virgin Australia (Thursday); News Corp, REA Group (Friday).

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