CommSec Senior Economist Ryan Felsman previews the economic & financial market events scheduled for the week ahead including the Reserve Bank Board meeting, International trade & China Inflation.

Australia: Reserve Bank dominates

• In the coming week, the Reserve Bank dominates the economic calendar. International trade, lending, services sector activity and job advertisements data will all be closely monitored for a post rate cut pick up.

• The week kicks off on Monday with the release of services surveys from AiGroup and CBA. And the Melbourne Institute’s inflation gauge is issued for July.

• On Tuesday all eyes will be on Martin Place, Sydney, when the Reserve Bank announces its interest rate decision at 2.30pm AEST. We expect the Board to ‘sit pat’ in August – continuing to observe incoming data – after successive rate cuts in June and July. Stimulus is expected to boost economic activity in the second half of the year.

• Also on Tuesday, the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Tax refunds and lower mortgage rates are supporting consumer sentiment.

• Also on Tuesday, the Bureau of Statistics (ABS) releases international trade data and ANZ provides an update on job advertisements. Australia’s external sector is in great shape. Commonwealth Bank economists expect a bumper trade surplus of $6 billion in July.

• On Wednesday, the ABS issues new lending data for June. Property market conditions – especially in Sydney and Melbourne – have improved through June and July, boosting hopes of an eventual stabilisation in housing finance approvals.

• Also on Wednesday, the AiGroup releases the Performance of Construction Index for July.

• On Thursday, Reserve Bank Assistant Governor (Financial System), Michele Bullock, speaks at the Toowoomba Chamber of Commerce Business Breakfast at 7.30am AEST.

• And on Friday the Reserve Bank releases its Statement of Monetary Policy. All eyes with be on the Board’s economic (GDP) growth and inflation forecasts. And Reserve Bank Governor Philip Lowe appears before House of Representatives’ Standing Committee on Economics in Canberra.

Overseas: Reserve of New Zealand set to cut rates and China data in the spotlight

• In the absence of tier-1 data releases in the US, investor focus will turn to China where international trade and inflation data are released. Across the Tasman, the Reserve Bank of New Zealand is widely expected to cut rates.

• The week begins on Monday in China, when the Caixin survey on services activity is issued for July.

• Also on Monday in the US, the ISM services gauge is released. A rebound is expected after services sector activity eased to the lowest level in two years in June. Vehicle sales are also provided by Ward’s Automotive.

• On Tuesday, the regular weekly reading on chain store sales is due together with the JOLTS series of job openings and IBD/TIPP Economic Optimism Index. Total job vacancies exceeded the number of unemployed Americans by 1.44 million in May. Skills shortages have pushed the US jobless rate down to 49-year lows.

• On Wednesday, the Reserve Bank of New Zealand is widely expected to cut the official cash rate by 25 basis points to 1.25 per cent. The most recent statement from the Monetary Policy Committee cautioned that, “more support from monetary policy was likely to be necessary.”

• On Wednesday in the US, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. June consumer credit (or lending) data is also issued and expected to remain steady at US$17 billion.

• In China on Thursday international trade data is issued by the National Bureau of Statistics. And consumer and producer prices data are released on Friday. Consumer prices are lifting due to elevated pork prices because of the African Swine flu epidemic. But risks of factory deflation are rising due to the US-China trade war.

• On Thursday in the US, the weekly figures on new claims for US unemployment insurance are issued, along with wholesale trade sales and inventories data. Inventories can influence the pace of economic activity.

• On Friday, US producer prices round out the week. Core producer prices increased in June, driven by a lift in trade services prices, implying a potential stabilisation in US inflation.

Financial markets

• The Australian corporate reporting season moves into first gear with a bevy of major companies expected to release earnings results. Companies reporting on Monday include Advance NanoTek, Cape Range, ImExHs and Universal Biosensors.

• On Tuesday: BWP Trust, Empyrean Energy, Shopping Centres Australasia Property and Zenith Energy.

• On Wednesday: Commonwealth Bank, FFI Holdings, King Island Scheelite, Reckon, Suncorp, Transurban and Zip.

• On Thursday: AGL Energy, AMP, Charter Hall Education Trust, IAG, Navigator Global Investments and Mirvac.

• On Friday: Alliance Aviation, Baby Bunting, Carpenteria Resources, Orora, REA and Strategic Energy Services.