CommSec Chief Economist Craig James previews the economic & financial market events scheduled for the week ahead including CBA Household Spending Intentions, Employment/unemployment & China Economic growth.
Australia: Employment data in the spotlight
• A relatively quiet week is in prospect in Australia. The highlight is Thursday’s job data.
• The week kicks-off on Monday when the Reserve Bank releases the latest data on credit and debit card transactions. This data has become more comprehensive in recent months including figures on overseas card purchases and a breakup between personal and commercial card transactions.
• Interestingly, the number of credit and charge card accounts stood at a near 5-year low in July (lowest since November 2014), down from 15.77 million to 15.70 million in July.
• On Tuesday, minutes of the last Reserve Bank Board meeting are issued. This was the meeting where the Board decided to cut rates to all-time lows. Investors are keen to know whether further rate cuts can be expected this year.
• Also on Tuesday, the usual weekly measure of consumer confidence is issued by ANZ and Roy Morgan, CommBank releases a survey of household spending intentions and data on tourism arrivals and departures is scheduled.
• The Australian Bureau of Statistics (ABS) releases the tourism flow data. But the actual release is entitled Overseas Arrivals and Departures. So not only does the publication contain information on tourism arrivals and departures but also on longer-term migration flows as well.
• In July, there were 95,810 permanent and long-term arrivals in Australia. The annual number of permanent and long-term overseas arrivals eased from a record-high of 850,770 people in June to 844,680 people in July, but was still up by 3.2 per cent over the year.
• On Thursday, the ABS releases the August estimates of employment and unemployment. The job market has taken on greater importance in Reserve Bank interest rate decisions. So in short, the data could prove pivotal. Although it is important to note that employment is a ‘lagging’ indicator – it reflects hiring and firing decisions made by firms as much as six months ago.
• Commonwealth Bank Group economists tip a 20,000 lift in jobs in September with the unemployment rate expected to remain steady at 5.3 per cent. In August, employment rose for the 35th consecutive month, up by 34,700 jobs, with the jobless rate up from 5.2 per cent to 5.3 per cent.
• Also on Thursday, Reserve Bank Deputy Governor Guy Debelle delivers a speech at the CFA Societies Australia Investment Conference in Sydney.
Overseas: Key Chinese data. US retail sales and production also in focus.
• There is top shelf indicators for release in both China and the US in the coming week. Also keep a watch out for key US earnings results with Citigroup, JP Morgan, Morgan Stanley, Goldman Sachs and Wells Fargo all due to report on Tuesday.
• The week begins on Monday in China when September trade (exports and imports) data is released. The data should provide insights into the impact of US tariffs on the economy. Also data on vehicles sales may be released on Monday in China together with money and lending figures.
• On Tuesday in China, the September data on inflation is issued – producer and consumer prices. Deflation has returned to producer prices. While higher food prices (especially pork) are driving consumer prices higher.
• In the US on Tuesday, the regular weekly reading on US chain store sales is due with data on consumer inflation expectations and the influential Empire State Manufacturing index.
• On Wednesday in the US is ‘Super Tuesday’. The weekly reading on mortgage applications is issued as well as retail sales, capital flows, business inventories and the housing market sentiment index from the National Association of Home Builders (NAHB). And to top it off, the Federal Reserve releases its Beige Book – a qualitative survey of conditions across Federal Reserve district banks. Investors will look for clues on a potential rate cut on October 31.
• Retail sales have been solid in recent months, underpinned by a strong job market and a gentle edging higher of consumer prices. In August, sales rose 0.4 per cent to stand 4.1 per cent higher over the year.
• On Thursday in the US, the usual weekly data on claims for unemployment insurance (jobless claims) is released, together with housing starts, industrial production and the Philadelphia Federal Reserve manufacturing index.
• While production rose 0.6 per cent in August it only stood 0.4 per cent higher over the year. The US-China trade war has impacted manufacturing across the globe.
• On Friday in the US, the leading index is released. And the IMF/World Bank annual meetings commence.
• On Friday in China, the September quarter economic growth figures are released. In the year to June the economy grew by 6.2 per cent. But all the indications point to a result near 6.0-6.1 per cent in the September quarter.
• As well as the economic data, the September monthly data on retail sales, production and investment are also due on Friday in China.