Inflation, retail trade & US jobs data in focus.
CommSec Chief Economist Craig James previews the economic data scheduled for the week ahead including the latest CommSec State of the States report, September quarter inflation data and the US jobs report.
Watch Video: https://youtu.be/DhnosnJj4K8
Australia: All eyes on inflation indicators
• Quarterly inflation figures feature in Australia in the coming week. In addition there will be keen interest in the monthly and quarterly retail trade results.
• The week kicks off on Monday in Australia when CommSec releases its quarterly State of the States report – an economic performance report of state and territory economies.
• On Tuesday the regular weekly reading on consumer confidence is published by ANZ and Roy Morgan. And the Australian Bureau of Statistics (ABS) releases building approval data for September.
• Also on Tuesday, Reserve Bank Assistant Governor Michele Bullock, will speak at the Commonwealth Bank Global Markets Conference.
• On Wednesday, the ABS releases the quarterly Consumer Price Index – the main measure of inflation in the economy. At this stage we expect that prices rose by 0.3 per cent in the September quarter, causing the annual inflation rate to ease from 2.1 per cent to 1.8 per cent. The “underlying” annual inflation rate may print near 1.9 per cent. Petrol prices rose by 1.5 per cent in the quarter after a 6.9 per cent increase in the June quarter.
• Also on Wednesday the Reserve Bank releases the September private sector credit figures (effectively the value of outstanding loans).
• On Thursday a bevy of indicators are released. CoreLogic releases its latest data on home prices. Home prices may have fallen around 0.5 per cent in the month with Melbourne prices down 0.7 per cent.
• Also on Thursday the ABS releases data on international trade (exports and imports) as well as data on export and import prices. Also both AiGroup and CBA will issue latest survey results of purchasing managers in the manufacturing sector.
• Australia has posted trade surpluses in the past eight months and in 14 of the past 16 months.
• And on Friday the ABS will release the September quarter readings on business inflation (Producer Price Indexes) as well as retail trade data for both September and the September quarter.
Overseas: US employment report hogs the limelight
• In the US in the coming week the focus will be the latest US jobs report on Friday. But there will be indicators covering inflation, manufacturing activity, home prices and auto sales. The Chinese purchasing manager survey results are issued Tuesday and Wednesday.
• On Monday in the US, the September data on personal income and spending are released. But other features of the data are the inflation measures – especially the core personal consumption deflator (excludes food and energy prices). The core PCE deflator is the Federal Reserve’s preferred inflation measure.
• On Tuesday in the US the S&P/Case Shiller measure of home prices is released together with consumer confidence and the regular weekly chain store sales figures.
• On Wednesday in the US, ADP releases its October report on private sector employment, derived from payroll records. Analysts expect that payrolls rose by around 200,000 in the month.
• Also on Wednesday in the US, the quarterly employment cost index is released together with the regular weekly data on mortgage applications.
• On Thursday in the US, the ISM manufacturing index for October is released with data on construction spending, new auto sales and the usual weekly data on claims for unemployment insurance (forward indicator of the job market).
• On Friday in the US is the highlight of the week’s reports – the non-farm payrolls or employment report. And it is clear that analysts will scrutinise all the key components. Employment may have lifted by around 180,000, continuing the run of strong job gains. The unemployment rate may have held at a 48-year low of 3.7 per cent. And wages may have lifted 0.3 per cent to keep annual wage growth near 2.8 per cent.
• Also on Friday in the US is data on international trade and factory orders. Analysts expect that the trade deficit narrowed from US$53.2 billion to US452.4 billion in September.
• In China, the National Bureau of Statistics releases the “official” purchasing manager survey results for manufacturing and services on Wednesday. The private sector Caixin manufacturing survey data is on Thursday.
• Another big week of US earnings reports lays ahead. Companies expected to report earnings this week include:
• On Tuesday: Baker Hughes, Coca-Cola, General Electric, Pfizer, Ebay, Facebook.
• On Wednesday: General Motors, Yum! Brands, Tesla.
• On Thursday: DowDupont and Apple.
• On Friday: Chevron and Exxon Mobil.
Important Information: The summary and attached report has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information in this report, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice. In the case of certain securities Commonwealth Bank of Australia is or may be the only market maker.