CommSec Chief Economist Craig James previews the economic & financial market events scheduled for the week ahead including the CoreLogic home prices, Reserve Bank Board meeting & US Beige Book.

Australia: the ‘Spring Tsunami’ of economic information

• In sharp contrast to the previous week, a barrage of new economic information is expected in the coming week. The ‘Spring Tsunami’ will include data on economic growth as well as a Reserve Bank Board meeting.

• The week kicks on Monday with a raft of economic indicators. Leading the way is the Business Indicators publication from the Australian Bureau of Statistics (ABS). Data included is company profits, stocks, wages and sales.

• The CoreLogic home value index will also get plenty of attention on Monday with home prices rising again in August.

• Also on Monday figures on job advertisements are released with the monthly inflation gauge and surveys of manufacturing purchasing managers conducted by both Commonwealth Bank and Australian Industry Group. Both surveys indicate that modest expansion of the manufacturing sector is proceeding.

• On Tuesday the Reserve Bank Board holds its monthly meeting. No change in interest rate settings is expected. The Reserve Bank Governor has indicated that the Board is gathering information to determine whether another rate cut is warranted.

• In economic data on Tuesday, the broader gauge of Australia’s trade or external position is released in the form of the current account figures. The current account has been in deficit since 1975. But that could all change on Tuesday with a small surplus forecast by a number of analysts.

• Also on Tuesday, the June quarter government finance statistics are released – a key input to the quarterly economic growth figures.

• Those economic growth estimates for the June quarter are issued as part of the “National Accounts” publication to be released on Wednesday. While there is still some information to be received (such as the government data) the economy probably grew by around 0.5 per cent in the June quarter to be up 1.8 per cent over the year.

• Also on Wednesday, the Federal Chamber of Automotive Industries (FCAI) is expected to release the August data on new car sales. The anecdotal evidence suggests that a larger number of budding home buyers are purchasing late model used cars in preference to buying new cars.

• On Thursday, the ABS issues the publication “International trade in Goods and Services”. In June the trade surplus hit a record high of $8 billion with exports to China at record highs.

Overseas: US jobs data grabs the spotlight

• As in Australia, a barrage of new economic information is set for release in both the US and China over the week. The monthly US jobs data (non-farm payrolls) is of most interest, but investors will have to wait until Friday to assess this new information.

• The week begins on Monday in China when the private sector media company, Caixin, releases the August survey of purchasing managers in the manufacturing sector. Earlier (on Saturday August 31) the “official” National Bureau of Statistics purchasing manager indexes on manufacturing and services are issued.

• After the Labor Day holiday in the US on Monday, the flow of economic data begins on Tuesday. First cab off the rank is data on construction spending together with surveys of purchasing managers in the manufacturing sector from the Institute of Supply Management (ISM) and Markit.

• Also on Tuesday is data on US new car sales and the IPD/TIPP economic optimism gauge.

• On Wednesday in China, Caixin releases the results of a survey of purchasing managers in the services sector.

• On Wednesday in the US, one of the weekly economic highlights is released. The Federal Reserve releases the Beige Book – a qualitative summary of economic conditions across Federal Reserve district banks.

• In economic data, the July trade figures (exports and imports) are released on Wednesday, together with weekly readings on chain store retail sales and mortgage applications as well as the regional ISM New York index. The monthly trade deficit sits near US$55 billion.

• On Thursday, the weekly figures on jobless claims are issued in the US, along with the ADP survey of private sector payrolls and factory orders. Results of the surveys of purchasing managers in the services sector will be published by ISM and Markit. The ISM index was at 53.7 in July with Markit at 53.0. Any reading above 50 represents expansion of the services sector.

• On Friday, the all-important US monthly Employment Situation survey publication is released containing data on non-farm payrolls or employment. The US jobs market is solid, with the good outcomes driving wage increases, and in turn, consumer spending.

• Analysts expect that jobs grew by 160,000 in August with the jobless rate near 49-year lows at 3.6-3.7 per cent. Average hourly earnings may have lifted by around 3.0 per cent over the year, still with a healthy gap above inflation.

Published by Craig James, Chief Economist, CommSec