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Inflation data dominates the economic calendar.
CommSec Chief Economist Craig James previews the economic data scheduled for the week ahead including quarterly inflation figures, US Federal Reserve meeting and US-China trade talks.
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Australia: Inflation in focus
• In the coming week, inflation data dominates the economic calendar.
• The week kicks off on Tuesday when CommSec releases the latest State of the States report, a quarterly report assessing the relative economic performance of state and territory economies.
• Also on Tuesday, the NAB business survey is released.
• On Wednesday, ANZ and Roy Morgan release the weekly consumer confidence data.
• Also on Wednesday the Australian Bureau of Statistics (ABS) issues the quarterly Consumer Price Index (CPI), the main inflation measure. We expect that the headline CPI rose by 0.4 per cent in the quarter, trimming annual growth from 1.9 per cent to 1.6 per cent. The average underlying rate may have risen 0.5 per cent in the quarter (1.8 per cent annual). In short, the cash rate is going nowhere for now.
• On Thursday, the ABS releases the December quarter data on export and import prices together with detailed estimates of the job market in December.
• Also the Reserve Bank issues the Financial Aggregates publication on Thursday, a publication that includes the latest data on private sector credit (effectively, loans outstanding).
• On Friday, CoreLogic releases the January Home Value Index – the most widely followed measure of home prices in Australia. Driven by lower prices in Sydney and Melbourne, the national measure of home prices probably fell 0.7 per cent in January to be down around 6.5 per cent over the year.
• The ABS releases yet another publication on prices on Friday, this time the Producer Price Indexes for the December quarter. The report covers various measures of business prices.
• Also on Friday both CBA and the AiGroup release the results of their separate surveys of purchasing managers in the manufacturing sector.
Overseas: Bevy of data and events
• In the US, the economic release schedule remains subject to change – a victim of the government shutdown. A mountain of indicators are delayed by the shutdown, including retail sales and economic growth.
• The US Federal Reserve meeting, US-China trade talks (January 30-31), the US earnings (profit reporting) season and Brexit discussions are amongst key events and possibly the US State of the Union on January 29.
• The week begins on Monday in China with data in industrial profits. In November, profits were up 11.8 per cent over the year.
• On Monday in the US, a bevy of economic indicators were to slated for release including retail sales, housing starts, new home sales, durable goods orders and international trade. Now investors can look forward to just two regional surveys – the Chicago Federal Reserve national activity index and the Dallas Federal Reserve manufacturing index.
• Over Tuesday and Wednesday US Federal Reserve policymakers meet to decide interest rate settings (decision 6am Sydney time on Thursday). Rates were lifted in December so a further move is not expected at the January meeting of policymakers. Indeed the text of the decision should confirm that rates are on hold for now.
• On Tuesday in the US, the S&P/Case-Shiller home price measure is released with the Conference Board gauge on consumer confidence. Home prices may have edged 0.1 per cent lower in November, trimming annual price growth from 5 per cent to 4.9 per cent.
• On Wednesday the advance (flash) reading of US economic growth (GDP) was to be released. Now we look forward to the ADP private sector employment report (175,000 lift in jobs expected) with pending home sales data and weekly mortgage applications.
• In the US on Thursday the weekly jobless claims data (new claims for unemployment insurance), Challenger job cuts and Chicago purchasing managers index are due for release.
• In China on Thursday the National Bureau of Statistics is expected to release both the manufacturing and services purchasing manager indexes (PMI). The private sector Caixin PMI for manufacturing is expected to be released on Friday with the equivalent services gauge set down for Sunday (February 3).
• On Friday in the US, the ISM manufacturing gauge is expected with consumer sentiment, new vehicle sales and the monthly jobs report (non-farm payrolls). Economists expect that the job market remained in good shape with 183,000 jobs created and a jobless rate of 3.9 per cent.
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