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Australia: Autumn avalanche

  • A quirk of the statistical schedule is that a barrage of economic data and events ushers in each change of season. And there will be more than a dozen indicators released over the first week of Autumn. The highlights of the week are the Reserve Bank Board meeting on Tuesday and the release of the National Accounts on Wednesday.
  • The week kicks off on Monday with the release of manufacturing indexes from both the AiGroup and IHS Markit. The CoreLogic home value index and the Melbourne Institute inflation gauge are both issued for February.
  • Also on Monday the Business Indicators publication from the Australian Bureau of Statistics (ABS) is scheduled. The quarterly data includes readings on profits, sales, inventories and wages. Company profits may have fallen 10 per cent in the December quarter after large government cash payments to businesses in prior quarters.
  • On Tuesday, Commonwealth Bank (CBA) Group economists release weekly credit and debit card spending data while ANZ-Roy Morgan release the weekly consumer sentiment survey.
  • Also on Tuesday, a current account surplus of $13 billion is expected in the December quarter when the Balance of Payments report is issued. Building approvals and quarterly government financial statistics round-out a busy day of economic data releases.
  • Following the announcement of a $100 billion six-month extension to its government bond-buying (‘Quantitative Easing’) program in February, no policy changes are expected at Tuesday’s Reserve Bank Board meeting.
  • On Wednesday, the ABS issues the National Accounts for the December quarter. Commonwealth Bank (CBA) Group economists expect economic growth – as measured by GDP – to lift around 2.6 per cent in the quarter.
  • Also on Wednesday, the AiGroup construction activity gauge, the ‘final’ IHS-Markit services index, new vehicle sales and the ABS weekly payroll jobs and wages data are all scheduled.
  • On Thursday, the ABS releases the final, detailed retail and international trade estimates for January. Preliminary data showed retail spending lifted 0.6 per cent. CBA Group economists expect a near record trade surplus of $9 billion in January.
  • Also on Thursday, the Reserve Bank Head of Financial Stability Jonathan Kearns participates in Moody’s Credit Trends panel discussion.
  • On Friday, the AiGroup issues the Performance of Services index for February.

Overseas: Focus on US jobs data and China purchasing managers surveys

  • Purchasing manager indexes in China will be in focus in the coming week as investors gauge the strength of its economic recovery. As always, Friday’s monthly US jobs data is the highlight of the offshore economic calendar.
  • The week kicks-off on Sunday in China with the ‘official’ purchasing managers’ indexes (PMI) from the National Bureau of Statistics. A resurgence in new Covid-19 cases in January dampened services sector activity. The private sector Caixin manufacturing index is also scheduled for release on Monday.
  • On Monday in the US, data on construction spending is released and there are two February purchasing manager surveys released for the manufacturing sector – from the Institute of Supply Management (ISM) and IHS-Markit. Measures of prices paid and charged by US businesses jumped in February to the highest levels in records going back to 2009.
  • On Tuesday, the regular weekly Johnson Redbook chain store sales data is issued with an update on vehicle sales. The ISM New York and IBD/TIPP economic optimism indexes for February are also both scheduled.
  • On Wednesday in China, the private sector Caixin services index is scheduled for the month of February.
  • On Wednesday in the US, a hodgepodge of economic releases are due: ADP private sector payrolls; purchasing manager services indexes from both the ISM and IHS-Markit; the US Federal Reserve Beige Book; and the usual weekly data on US mortgage applications from the Mortgage Bankers Association (MBA).
  • On Thursday, there is another eclectic array of economic data: Challenger job cuts; factory orders; ‘final’ December quarter unit labour costs and non-farm productivity figures; and the regular weekly data on jobless claims (claims for unemployment benefits).
  • To round off a busy week on Friday, the February jobs report is released with January international trade and consumer credit data.
  • The US labour market has lost some momentum due to virus restrictions, fading stimulus and freezing winter weather, which have affected economic activity. Economists expect around 160,000 jobs to have been added in February on top of January’s disappointing employment gains of just 49,000. The unemployment rate may edge up from 6.3 per cent to 6.4 per cent, but the reading on workforce participation is highly uncertain this month due to virus restrictions and cold weather.

Published by Ryan Felsman, Senior Economist, CommSec