CommSec Chief Economist Craig James previews the economic & financial market events scheduled for the week ahead including the NAB business survey, Monthly consumer sentiment & China Inflation.
Australia: Business and consumer confidence in focus
• The wind-down to Christmas has begun. The highlight in the coming week is probably the latest business survey.
• The week actually kicks off on Tuesday with the release of that National Australia Bank (NAB) business survey. In October both business conditions and consumer sentiment rose. The business confidence index rose from a 6-year low of -0.3 points to +1.7 points. And the business conditions index rose from +1.7 points to +3.0 points in October. Encouragingly in respect of lending, fewer businesses have indicated that ‘no borrowings are required’ – suggesting more confidence about taking on debt.
• The Reserve Bank Governor, Philip Lowe, delivers a speech on Tuesday at the AusPayNet Summit in Sydney (9.05am AEDT). Assistant Governor, Michele Bullock, speaks at the same summit.
• Also in a busy day on Tuesday, the Bureau of Statistics (ABS) releases the Residential Property Price indexes and the ‘experimental’ Labour Account figures. The weekly consumer sentiment index is also released by ANZ and Roy Morgan.
• The September quarter property price data is somewhat dated given the release of the already published CoreLogic data for the November month. But the ABS survey includes other data such as the number of residential properties in each state and territory.
• On Wednesday, Westpac and the Melbourne Institute issue the December consumer sentiment index. The index is now largely a check on the more regular weekly survey. But the December sentiment survey also includes the results of the survey of the wisest place to put new savings.
• For both surveys of consumer confidence, recent highs were back in May – before rates were cut in June, July and October. Confidence is now near 4-year lows.
• On Thursday, the ABS releases the publication: “Overseas Arrivals and Departures”. The publication includes data on tourism flows together with longer-term migration inflows and outflows.
• Tourist arrivals fell 2.6 per cent in September with departures flat. The data confirmed that mainland China is the largest source of tourists to Australia. Over the past year a record 1,462,500 tourists came to Australia from China, up by 2.1 per cent on the year earlier.
• Also on Thursday the Reserve Bank issues its latest Bulletin. This publication includes “articles that discuss economic and financial developments as well as the Bank’s operations”.
• Also from the Reserve Bank on Thursday, the October data on credit and debit card lending is released from the Reserve Bank.
Overseas: US Federal Reserve meeting; Inflation in focus
• The US Federal Reserve meets for the last time in 2019. Inflation data is released in China and the US.
• The week kicks off on Sunday in China with economists tipping a widening of the trade surplus in November. In October, imports were down 6.5 per cent on the year with exports down 0.9 per cent.
• Then on Tuesday in China, the November data on consumer and producer prices is expected. Producer prices are down 1.6 per cent on the year. Consumer prices are up 3.8 per cent due to soaring pork prices.
• The week begins in the US on Monday with data on consumer inflation expectations. And on Tuesday is the NFIB business optimism index, productivity and labour cost data and weekly chain store sales.
• Over Tuesday and Wednesday in the US, the Federal Reserve Open Market Committee (FOMC) meets to decide rate settings. The economy is in good shape so no change in rates is expected or warranted. There will be the usual interest in the press conference of the Fed chair, Jerome Powell. And there will also be interest in the FOMC economic projections.
• Also on Wednesday, the regular weekly data on mortgage applications is released with November consumer prices and the monthly budget. In China on Wednesday, data on motor vehicle sales is expected.
• On Thursday in the US, the November data on producer prices is released alongside the weekly data on new claims for unemployment insurance (jobless claims).
• On Friday in the US, data on retail sales, international trade prices and business inventories are all slated for release. Early readings in the Black Friday sales are expected in the retail sales data.
• Also on Friday in China, a raft of money supply, credit and lending figures are tentatively scheduled for release.