Craig James – Chief Economist – CommSec

Reserve Bank dominates the agenda
·       If it wasn’t for the Reserve Bank, it would be a sparsely-populated Australian economic calendar. There are two speeches from Reserve Bank officials and two key reports from the central bank.
·       The week kicks off on Monday with the Australian Bureau of Statistics (ABS) releasing the August data on new vehicle sales. The industry body – Federal Chamber of Automotive Industries – has already released the raw data on sales. And this showed that sales were at a record high for an August month. With car affordability at record highs, it makes sense that we buying more cars. The ABS will recast the data in seasonally adjusted terms.
·       On Tuesday the Reserve Bank issues minutes of the last Board meeting held on September 5. The report is useful in getting fresh insights on the economy – especially the reports of Reserve Bank liaison with business and retailers.
·       Also on Tuesday the ABS releases the June quarter report on the residential property sector. The data includes price indicators but there are also statistics on the number of homes in Australia and home sales (transfers). From the figures it is also possible to obtain metrics such as the number of people per home.
·       And the weekly data on consumer confidence is also scheduled for release on Tuesday. Consumer sentiment is soft but that hasn’t stopped people from buying – spending growth is around “normal” levels.
·       On Wednesday, Commonwealth Bank releases the Business Sales Indicator – a measure of economy-wide spending derived by looking at credit card and debit card transactions by CBA merchants.
·       Also on Wednesday, the Reserve Bank Assistant Governor (Economic), Luci Ellis, speaks at the Australian Business Economists (ABE) conference.
·       On Thursday the ABS releases the detailed labour market figures for August. As well as providing key demographic and geographic estimates, the August data contains the quarterly estimates of employment by industry sector and profession. The services sectors have been leading the way in job creation.
·       And also on Thursday the Reserve Bank releases its quarterly Bulletin, containing topical articles on the economy and financial markets.
·       Also on Thursday the Reserve Bank Governor is scheduled to deliver an address in Perth to the American Chamber of Commerce. The title for the speech is intriguing: “The Next Chapter”. But there are no further details as yet.
Overseas: the US Federal Reserve Open Market Committee (FOMC) meets
·       A highlight of the offshore diary in the coming week is the latest policy decision from the US Federal Reserve. There are also some housing indicators to watch. And in China, the only data of note covers home prices.
·       In fact the Chinese data on home prices kicks off the week on Monday. Home prices are starting to flatten and the annual growth rate eased to 9.7 per cent in August.
·       In the US, the week kicks off on Monday with the July data on capital flows and foreign buying of equity and bond securities.
·       Also issued on Monday is the September sentiment gauge on the home building sector from the National Association of Home Builders (NAHB). The qualitative housing market index is not far off the best levels in 12 years.
·       The Federal Reserve begins its 2-day meeting on Tuesday with the decision announced at 4am Sydney time on Thursday morning. While no interest rate increase is expected, the policymakers are expected to release details of the plan to reduce the central bank’s $4.5 trillion stock of bond and other assets.
·       Also on Tuesday, two of the key measures of inflation are released in the US – the August data on import and export prices. Import prices are tipped to have lifted 0.2 per cent in the month.
·       The usual weekly data on chain store sales is also issued on Tuesday.
·        On Wednesday the existing home sales data for August is issued (a small 1 per cent lift in sales is expected) as well as the weekly data on housing finance.
·       On Thursday the influential Philadelphia Federal Reserve survey results are released together with the leading index and the Federal Housing Finance Agency measure of home prices. Home prices are up 6.5 per cent over the year to June.
·       The normal weekly data on claims for unemployment insurance is issued on Thursday.
·       And on Friday, Markit releases ‘flash’ estimates on manufacturing and services sector activity in the US and Europe.

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Originally published by Craig James, Chief Economist, CommSec