CommSec Senior Economist Ryan Felsman previews the economic data scheduled for the week ahead including the latest CommSec State of the States report, the May Reserve Bank Board Meeting and the RBA Statement on Monetary Policy.

Australia: Reserve Bank in focus
• In Australia over the coming week, the Reserve Bank takes centre-stage. The Board meeting on Tuesday is followed by a dinner in Adelaide with a speech from Governor Philip Lowe scheduled. On Friday the Bank releases its quarterly statement on monetary policy.
• The week kicks off on Monday with the release of the quarterly State of the States report from CommSec. The report tracks the economic performance of the states and territories.
• Also on Monday the Reserve Bank issues the March Financial Aggregates publication. Private sector credit (effectively outstanding loans) rose by 0.4 per cent in February after a 0.3 per cent rise in January. Annual credit growth held at a 3½-year low of 4.9 per cent. M3 money supply rose by 3.8 per cent over the year, the slowest growth in 25 years. Data on new home sales is also expected on Monday.
• On Tuesday data on home prices, the weekly Roy Morgan-ANZ consumer sentiment survey and surveys on the manufacturing sector are all released in a hectic start to the month.
• Also on Tuesday the Reserve Bank Board meets but no change in the neutral monetary policy stance is expected. Interest rates are firmly on hold until at least year-end due to retail deflation and modest wages growth. Governor Philip Lowe is scheduled to speak at the Board’s dinner in Adelaide.
• On Thursday, local council building approvals data for March is issued. Residential building approvals fell by 6.2 per cent in February, led lower by volatile apartment approvals which declined by 16.4 per cent. However, detached house approvals rose by 1.9 per cent. Surveys on the services sector for the month of April are also issued by both the CBA and AiGroup.
• Also on Thursday Australia’s international trade data for March is released. A healthy $825 million surplus was recorded in February, continuing a solid run of results since late 2016.
•  On Friday, new vehicle sales data is issued. Australia’s new vehicle market grew 2.5 per cent to a record-high 1.2 million units over the year to March. 
•  Also on Friday, the Reserve Bank releases its quarterly Statement on Monetary Policy. As well as being a comprehensive assessment of the state of the economy, the Board also provides updated forecasts.
Overseas: US Federal Reserve meets and US employment report headlines data releases
• All eyes will be on the US Federal Reserve policy meeting on Wednesday. The employment report rounds out a busy week of data releases in the US. Monthly manufacturing and services activity gauges are due in China. 
• The week kicks off in China on Monday when the National Bureau of Statistics issues the purchasing managers’ surveys for April. Activity picked-up in March as businesses returned to work following the Lunar New Year.
• In the US on Monday the personal income and spending report is released. The US Federal Reserve’s preferred measure of inflation – the personal consumption expenditure deflator – will be keenly observed. The deflator has been static around 1.5-1.6 per cent since September, but an increase to 1.8 per cent is expected in March.
• Also on Monday US pending home sales are tipped to lift by 0.6 per cent in April following a 3.1 per cent increase in March. Regional manufacturing surveys from the Chicago and Dallas Federal Reserve are issued.
• On Tuesday US manufacturing surveys are released by Markit and the ISM. According to ISM, new orders, output and employment rose at a softer pace in March, decelerating from 14-year highs in February.
• On Wednesday the Chinese private sector Caixin purchasing manager’s index for manufacturing is released.
• Also on Wednesday the US Federal Reserve announces its all-important interest rate decision. No change in interest rates are expected following last month’s increase. Policymakers have an optimistic view that the US economy is strengthening, the labour market is tightening and inflation will gradually rise over the coming months. The ADP survey is expected to show that private sector companies hired a further 200,000 job seekers in April.
• On Thursday the US ISM services sector survey is issued with factory orders and trade. US factory orders are expected to have increased by 0.9 per cent in March after rising by 1.2 per cent in February. A trade deficit of US$56.7 billion is forecast in March – near 9-year highs. Imports continue to increase on strong demand.
• On Friday China’s private sector services sector activity gauge is issued by Caixin.
• Also on Friday the US jobs report for April is released. The unemployment rate is forecast to fall to 4.0 per cent while the data should show an additional 195,000 jobs were created in the month.
Financial markets
• The ‘Big Four’ Australian banks start reporting their first half-year 2018 earnings this week. Consensus earnings downgrades are expected on the back of increasing margin pressures from rising short-term funding costs and headwinds from regulatory reviews.
• ANZ kicks-off the results on Tuesday. Investor focus is likely to be on ‘stranded’ costs and guidance on additional capital management plans.
• National Australia Bank reports its earnings on Thursday. Progress on its restructuring and medium-term expense savings will be the key focal points.
• On Friday the composition of Macquarie Group’s earnings, specifically the balance between performance fees, trading and net interest income will be keenly observed.

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