Investor Signposts 15 Mar 19: Jobs and population data in focus.
CommSec Senior Economist Ryan Felsman previews the economic and financial market events scheduled for the week ahead including the RBA Board Minutes, the February employment data and the latest population figures.
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Australia: Jobs and population data in focus
• In the coming week the all-important jobs report is released. The Reserve Bank’s March monetary policy meeting minutes are issued. Population data is also scheduled.
• The week kicks off on Tuesday with a speech on “Bonds and Benchmarks” by Reserve Bank Assistant Governor (Financial Markets) Christopher Kent at the KangaNews DCM Summit in Sydney. And the Reserve Bank’s March 5 monetary policy meeting minutes will be released at 11:30am Sydney time.
• Also on Tuesday, the regular weekly reading on consumer confidence is published by ANZ and Roy Morgan. And the Bureau of Statistics’ releases its quarterly publication “Residential Property Price Indexes”. Apart from home prices there is other data covering the average value of homes and changes in the number of homes in each state.
• On Wednesday the Commonwealth Bank issues its Business Sales Indicator for February. And the Department of Jobs and Small Business releases the Internet Vacancy Index for February. In January, the index rose by 1.3 per cent to a 6½-year high of 88.2 points. It was the fourth straight gain in the trend index. The index is 3.3 per cent higher than a year ago.
• Also on Wednesday, Michele Bullock, Reserve Bank Assistant Governor (Financial System) gives a speech at the Urban Development Institute of Australia in Perth.
• On Thursday, the February employment report is released. Leading indicators of jobs growth have been mixed and there has been a loss of momentum in private-sector activity. That said, 65,400 full-time jobs were added in January with the NSW unemployment rate falling to 3.9 per cent – the lowest level since the 1970s. CBA economists’ forecast 15,000 jobs to be added with the unemployment rate steady at 5 per cent.
• Also on Thursday the Bureau of Statistics’ releases the September quarter population estimates. Annual population growth probably held near 1.5-1.6 per cent – still one of the fastest rates across advanced nations.
• The Reserve Bank releases the quarterly Bulletin publication also on Thursday.
• On Friday, the Commonwealth Bank releases the ‘flash’ Purchasing Manager indexes for March.
Overseas: The US Federal Reserve takes centre stage
• In the absence of any ‘top shelf’ data releases in China, the US Federal Reserve’s interest rate decision is the highlight for investors in the week ahead.
• The week begins on Monday in the US when the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index for February is released. According to NAHB Chair Randy Noel, the “Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment. In the aftermath of the fall (autumn) slowdown, many builders are reporting positive expectations for the spring selling season.” The home builder sentiment index is currently at 4-month highs at 62 points.
• On Tuesday, the January data on US factory orders is released along with the weekly chain store sales figures. Economists estimate that factory orders fell by 0.1 per cent. New orders for US-made goods rose by just 0.1 per cent in December and business spending on equipment was much weaker than expected, pointing to a softening in manufacturing activity.
• Also on Wednesday the US Federal Reserve’s Open Market Committee (FOMC) hands down its interest rate decision at the conclusion of its two-day meeting. Chair, Jerome Powell, is expected to reiterate in his press conference the FOMC’s recently stated position that it can be patient when it comes to the future path of monetary policy. With inflation pressures “muted”, the US facing “crosscurrents” from slowing global growth and likely winter-impacted March quarter economic activity, we expect the Federal Reserve to remain sidelined this year.
• In an interview on CBS News’ “60 Minutes” on Sunday, Chair Powell called the current rate setting “roughly neutral” – meaning it’s neither stoking nor slowing growth – and “patient means that we don’t feel any hurry to change our interest rate policy.” Several policymakers have expressed support for ending the run-off of assets from the central bank’s US$4 trillion balance sheet later this year with a timetable expected to be announced.
• On Thursday, manufacturing sector data from the Federal Reserve Bank of Philadelphia is released together with the Conference Board’s Leading Index and the weekly figures on new claims for unemployment insurance. The “Philly Fed” survey on general business conditions contracted by 4.1 points in February – the first negative reading since May 2016. But a modest rebound to 3 points is expected in March.
• On Friday, IHS Markit issues ‘flash’ manufacturing indexes for major advanced economies. Factory activity is contracting in Germany and Japan and at its lowest level in two years in the US due to slowing global trade flows.
• Also on Friday in the US, the monthly budget statement and existing home sales data are both issued.
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