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CommSec Senior Economist Ryan Felsman previews the economic & financial market events scheduled for the week ahead including the Reserve Bank Board minutes, Population & China investment, production, and retail data.

Australia: Jobs, tourism & population data in focus

  • In the coming week, the monthly jobs data will dominate investor attention. But the international tourism data will be closely watched, given the likely detrimental impact on tourist arrivals from coronavirus (COVID-19), related travel bans and the bushfire crisis. Investors are increasingly pricing in an interest rate cut from the Reserve Bank in early April, so communication from the Reserve Bank will also be a key focus.
  • The week kicks off on Monday when the Bureau of Statistics (ABS) releases tourism and migration data in the Overseas Arrivals and Departures publication for January.
  • Also on Monday, Reserve Bank Head of Economic Analysis Dr Alexandra Heath delivers a speech in Melbourne at 1.30pm.
  • On Tuesday, the Commonwealth Bank issues the Household Spending Intentions (HSI) survey. The ABS also releases the December quarter Residential Property Price indexes – with a 3 per cent lift in capital city property prices expected. And the regular ANZ-Roy Morgan weekly reading on consumer confidence is due.
  • Also on Tuesday, the Reserve Bank issues the minutes of its March 3 policy meeting where the official cash rate was cut by 25 basis points to a record low 0.5 per cent. The discussion at the meeting would have centred on COVID‑19 and the impact especially on tourism, education and resources. There is speculation that the Reserve Bank may cut rates again by a further 25 basis points at the next April 7 Board meeting in Hobart.
  • On Wednesday, Reserve Bank Assistant Governor (Economic) Dr Luci Ellis speaks at the Urban Development Institute (UDIA) National Congress at 10am.
  • On Thursday, the ABS releases the December quarter population estimates together with the February labour market data. Annual population growth probably held near 1.5 per cent – still one of the fastest rates across advanced nations. And 10,000 jobs are tipped by Commonwealth Bank economists to have been added in February, but the jobless rate may edge up to 5.4 per cent.

Overseas: Central banks in focus

  • Over the coming week all eyes will be on central banks with the US Federal Reserve and People’s Bank of China both expected to cut interest rates.
  • The week kicks off on Monday in China when January-February activity data is scheduled for release. Chinese investment, production and retail spending figures are all expected to contract due to travel bans, factory shutdowns, production restrictions and shipping disruptions due to government COVID-19 containment measures. Bloomberg estimates that China’s economy was only operating at 40-60 per cent capacity during February, but has since lifted to 70-80 per cent of its ‘normal’ level at the beginning of March.
  • Also on Monday in China, an update on new and existing home prices for the month of February are due.
  • In the US on Monday, the Federal Reserve Bank of New York releases the March Empire State reading of manufacturing activity. January capital flows data is also expected.
  • On Tuesday, the regular weekly reading on US chain store sales is issued with retail sales, industrial production, business inventories, JOLTS job openings and homebuilder sentiment data from the National Association of Home Builders. Retail spending is expected to lift by 0.2 per cent in February.
  • On Wednesday, the regular weekly data on mortgage applications is released with February building permits and housing starts data. Starts are tipped to fall by 5.9 per cent to a 1.475 million unit annualised rate in February. And building permits are expected to decline by 4 per cent to a 1.488 million unit annualised rate – down from the 1.55 million annual rate in January – the strongest level since March 2007.
  • Also on Wednesday, the US Federal Reserve Open Market Committee (FOMC) concludes its two-day monetary policy meeting. Most economists expect the FOMC to cut the Federal Funds rate by at least 50 basis points following the half per cent ‘emergency cut’ on March 3. But the FOMC historically has cut rates by 50 basis points following crisis-focused intra-meeting cuts.
  • FOMC chair Jerome Powell’s post-FOMC meeting press conference will be closely monitored for clues on the future direction of interest rates. Chair Powell recently said, “The virus and the measures that are being taken to contain it will surely weigh on economic activity” for “some time”.
  • On Thursday, weekly data on new claims for unemployment insurance (jobless claims) is issued. The Conference Board Leading index and March Philadelphia Fed Manufacturing index are also scheduled. The Leading index rose by 0.8 per cent in January – the biggest monthly lift in 27 months.
  • On Friday in China, the People’s Bank of China is expected to provide further stimulus to China’s ailing economy when another 5 basis points cut in the 1-year and 5-year Loan Prime Rates to 4.00 and 4.70 per cent, respectively, are expected.
  • Also on Friday in the US, existing home sales data for February is scheduled. Sales of previously-owned US homes remain robust due to scarce inventory, lower borrowing costs and higher wages. The data is expected to show a 1.7 per cent lift in sales to an annualised rate of 5.55 million units in February.