3min read
PREVIOUS ARTICLE Short Selling Under the Micros... NEXT ARTICLE 8 lessons from 12 remarkable m...

Australia: The Reserve Bank is out of hibernation

  • In the coming week, the Reserve Bank dominates the economic calendar following its summer hiatus.
  • On Monday, the CoreLogic Home Value Index is issued. The national measure of home prices probably rose by around 0.5 per cent in January. National home values rose by 3.0 per cent in 2020.
  • Also on ‘Super Monday’, a bevy of monthly economic data is released including lending indicators, ANZ job advertisements, inflation and manufacturing activity gauges.
  • On Tuesday, Commonwealth Bank (CBA) Group economists release weekly credit and debit card spending data. Other weekly data releases include the ANZ-Roy Morgan consumer sentiment gauge and the Bureau of Statistics (ABS) weekly payroll jobs and wages data. And regional internal migration estimates are issued for September 2020.
  • Also on Tuesday, the Reserve Bank (RBA) Board meets for the first time in 2021 with no change in policy settings expected. The RBA Board targets a 0.1 per cent rate for both three-year government bond yields and official cash.
  • On Wednesday, RBA Governor Philip Lowe delivers a speech entitled “The Year Ahead” at the National Press Club in Canberra at 12.30pm AEDT. Economists will be most interested in the Governor’s plans for the Bank’s yield curve control strategy and bond buying (quantitative easing, ‘QE’) program with the post-pandemic economic recovery expected to gain traction.
  • Also on Wednesday, new vehicle sales and building approvals data are issued with the AiGroup construction gauge and the ABS quarterly ‘Living Cost Indexes’. In December, new vehicle sales were up 13.5 per cent from a year ago.
  • On Thursday, the ABS releases international trade data for December with a 36th successive monthly trade surplus expected. An array of Aussie commodity exports have been hit by China trade duties and tariffs in 2020.
  • On Friday, the final retail trade report is issued for December. Preliminary retail spending fell 4.2 per cent. But economists will be most focused on the December quarter real (inflation-adjusted) retail trade figures.
  • Also on Friday, the RBA releases its Statement on Monetary Policy. All eyes with be on the updated forecasts for economic growth, inflation and the labour market (unemployment rate and wage growth).

Overseas: US jobs data and China purchasing managers’ indexes in focus

  • In the coming week China purchasing manager indexes are scheduled. In the US, ‘tier-1’ data on jobs, manufacturing, construction and international trade will be of most interest to investors.
  • The week kicks off in China on Sunday with the release of the official manufacturing and services purchasing manager indexes for January. And the private sector Caixin factory activity gauge follows on Monday.
  • On Monday in the US, the January Institute for Supply Management (ISM) manufacturing index – which expanded at the fastest pace since 2018 in December – is released. The IHS Markit final January factory activity reading, construction spending and the Wards vehicle sales report are also scheduled.
  • In the US on Tuesday, the regular weekly Johnson Redbook chain store sales data is released with the IBD/TIPP economic optimism index for February.
  • On Wednesday in China, Caixin releases its services sector purchasing manager index for January.
  • On Wednesday in the US, the Mortgage Bankers Association (MBA) issues weekly data on mortgage applications with the ADP private sector payrolls (employment) report. And updates on services sector activity from the ISM and IHS Markit are scheduled for January with the ISM survey expected to remain steady at 57.0.
  • On Thursday in the US, the regular weekly data on claims for unemployment insurance is issued. Other labour market-related data including Challenger Job Cuts, December quarter nonfarm productivity and unit labour costs are all due. In 2020, over 2.3 million US job cuts were announced – the highest annual total on record.
  • Also on Thursday, factory orders data is scheduled for December with the ISM New York index for January.
  • On Friday, the all-important January nonfarm payrolls (jobs) report is scheduled. Economists expect 100,000 jobs to be added with the unemployment rate steady at 6.7 per cent. And international trade and consumer credit figures round-out the economic calendar in the US.

Australian profit-reporting season

  • According to Bloomberg, ASX-listed companies expected to report over the week include:
  • Monday: Freelancer; GUD Holdings; Naked Brand Group; VGI Partners Asian Investments
  • Tuesday: CIMIC Group; Centuria Industrial REIT; Credit Corp Group
  • Wednesday: Advance Nanotek; BWP Trust; Temple & Webster, Amcor
  • Thursday: Pinnacle Investment Management; Nick Scali
  • Friday: Centuria Office REIT; REA Group

Published by Ryan Felsman, Senior Economist, CommSec