Australia: Winter Whirlwind

  • A strange quirk of the statistical calendar is that each new season is ushered in by a barrage of new economic data. So, the ‘Winter Whirlwind’ is upon us – around a dozen surveys or data releases are scheduled over the coming week.
  • The week kicks off on Monday with manufacturing surveys from AiGroup and the Commonwealth Bank (CBA). The Melbourne Institute inflation gauge is released. And CoreLogic’s national home price index is tipped to fall by around 0.5 per cent in May.
  • On ‘Super Tuesday’, the Bureau of Statistics (ABS) issues the ‘Business Indicators’ publication that includes data on profits, sales, wages and stocks. The quarterly balance of payments figures are also released with government finance, CBA credit & debit card and weekly consumer sentiment data.
  • Also on Tuesday, the Reserve Bank meets with the official cash rate expected be left at 0.25 per cent and the target for the yield on 3‑year Australian Commonwealth Government Bonds also retained at 0.25 per cent.
  • On Wednesday the focus will be on the March quarter economic growth (GDP) estimates. The reading is likely to determine whether Australia suffers a ‘technical’ recession for the first time in almost 30 years. CBA Group economists forecast that the economy contracted by around 0.3 per cent in the quarter. Prior to the release, Reserve Bank Assistant Governor Michele Bulloc, Assistant Governor (Financial System) speaks at an online event, “Panic, Pandemic and Payment Preferences” at 11.15am AEST.
  • Also on Wednesday, the CBA releases the ‘final’ May survey on services activity. Building approvals for April are expected to fall 15 per cent. The Federal Chamber of Automotive Industries issues new vehicle sales data. The AiGroup Performance of Construction index is also due. Data will be impacted by the pandemic lockdown.
  • On Thursday, the April figures on exports and imports (international trade) are released with a trade surplus of around $7.5 billion tipped by CBA Group economists. The final reading on retail trade is also issued. ‘Preliminary’ retail trade fell by a record 17.9 per cent in April after rising a record 8.5 per cent increase in March.
  • On Friday, the AiGroup’s Performance of Services index is issued for May with a contraction in activity expected.

Overseas: US jobs data & China trade figures awaited

  • A busy week is in prospect. In the US, non-farm payrolls (jobs) will be the key focus on Friday. Chinese international trade figures are scheduled on Sunday and will be scoured for evidence of a rebound in demand.
  • The week begins on Monday with readings on the manufacturing sector in the US and China. In the US there are May surveys from Markit and the Institute of Supply Management (ISM). In China, there is the survey from the private sector Caixin group. Manufacturing activity is contracting across the globe due to virus shutdowns.
  • Also on Monday in the US is data on construction spending. Economists forecast spending to decline by around 5 per cent in April after lifting by 0.9 per cent in March.
  • On Tuesday in the US, motor vehicle sales data is issued by Ward’s Automotive Group together with the ISM New York index and the Johnson Redbook weekly chain store sales figures.
  • On Wednesday, the focus shifts to surveys on the services sector. Again, in the US there are the Markit and ISM services surveys. In China, the services survey is conducted by Caixin for the private sector.
  • Also on Wednesday in the US is the ADP survey of private sector payrolls for May with the Mortgage Banker’s Association (MBA) weekly mortgage applications data. In a busy day, factory orders and the ‘final’ reading on durable goods orders – a proxy of business investment – are also issued. Economists forecast factory orders to fall by 15.1 per cent in April following a 10.4 per cent decline in March.
  • On Thursday in the US, the April international trade data (exports and imports) is released. The trade deficit is expected to contract by around US$2 billion to US$42 billion in April. US exports of goods and services plunged in March by a record 9.6 per cent – the most in 11 years – and imports fell by 6.2 per cent as the pandemic adversely impacted trade and travel.
  • Also on Thursday are final estimates of unit labour costs and productivity for the March quarter, the Challenger survey of job cuts and the weekly data on initial jobless claims (claims for unemployment insurance).
  • On Friday in the US, the all-important nonfarm payrolls (jobs) data is released with consumer credit figures. Employers cut an unprecedented 20.5 million jobs in April with the unemployment rate lifting to 14.7 per cent – the highest level since the Great Depression. US states have begun to reopen as the virus outbreak subsides, but economists still tip around 8 million jobs to have been lost in May. The unemployment rate is expected to skyrocket to around 19.7 per cent.
  • In China on Sunday, international trade data is due for May. Weak external demand, fewer working days in the month and a high base 12 months ago all pose headwinds to export growth.

Published by Ryan Felsman, Senior Economist, CommSec