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Australia: Jobs, wages & confidence data dominate

  • In the coming week, there are a number of key economic indicators and events to focus on. The July jobs data, business and consumer confidence and company earnings results are the highlights.
  • The week starts on Tuesday when Commonwealth Bank (CBA) releases its weekly data on credit and debit card spending and ANZ-Roy Morgan issues weekly consumer sentiment data. The Australian Bureau of Statistics (ABS) also issues weekly payrolls & wages data.
  • Also on Tuesday, the NAB business survey is released for July. Confidence and conditions had improved in June as the economy re-opened with significant policy stimulus to support Aussie businesses and workers. But Roy Morgan’s business confidence index plunged in July as restrictions were tightened and businesses re-closed in Melbourne amid rising concerns about a second wave of virus infections.
  • On Wednesday, Westpac and Melbourne Institute’s August consumer confidence survey is released. Consumer views on their finances has remain resilient due to wage subsidies, mortgage deferrals and superannuation withdrawals. But sentiment towards the economy is deteriorating as Victoria’s COVID-19 crisis could prolong the biggest contraction in output since the Great Depression.
  • Also on Wednesday, the ABS issues the Wage Price Index (WPI) for the June quarter. CBA Group economists predict that wages grew by 0.3 per cent in the quarter to be 1.9 per cent higher than a year ago.
  • On Thursday, the all-important labour force report for July is issued. The unemployment rate is expected to rise to 7.9 per cent from 7.4 per cent due to a higher workforce participation rate despite an expected 50,000 jobs being created. And the ABS’ May average weekly earnings figures are released, providing dollar estimates of wages in the economy.
  • On Friday, the Reserve Bank Governor Philip Lowe appears before the House of Representatives’ Standing Committee on Economics at 9.30am AEST. The final June reading on overseas arrivals/departures is also due.

Overseas: US retail spending and Chinese activity data in focus

  • US retail spending data is in the spotlight in the coming week together with China’s monthly activity data.
  • The week kicks off in China on Monday with inflation data scheduled for July. Consumer prices are tipped to lift by 2.6 per cent, while producer prices could fall by 2.5 per cent when compared with a year ago.
  • And in the US on Monday, job openings are tipped to ease from 5.4 million to 4.2 million available positions when the Labor Department’s Job Openings & Labor Turnover Survey (JOLTs) is released.
  • On Tuesday, the National Federation of Independent Business (NFIB) Small Business Optimism survey and producer prices index are both released with weekly Johnson Redbook chain store sales figures.
  • On Wednesday in New Zealand, the Reserve Bank of New Zealand (RBNZ) announces its interest rate decision. While no change in the overnight cash rate (OCR) is expected, the RBNZ is under increasing pressure to fend off a stronger Kiwi dollar which is placing “further pressure on export earnings.”
  • On Wednesday in the US, the usual weekly data on US mortgage applications from the Mortgage Bankers Association (MBA) is issued together with the monthly budget statement and inflation data. Headline consumer prices jumped 0.6 per cent in June – the most since 2012 – due to a rebound in gasoline costs.
  • On Thursday, the weekly data on jobless claims are issued with import and export price indexes in July.
  • On Friday in China, the July retail sales, industrial production and fixed asset investment figures are all scheduled. Continued fiscal support, flooding in Southern China and the suppression of the virus outbreak in Beijing could influence outcomes. Retail spending is expected to be up 0.2 per cent from a year ago – the first lift in 2020. Industrial activity has gained momentum with production tipped to lift by 5.1 per cent on a year ago.
  • And on busy day for data releases, on Friday in the US, retail sales, industrial production, business inventories, nonfarm productivity and unit labour costs figures are all scheduled with the preliminary University of Michigan consumer sentiment index for August. Most focus will be on the July retail spending data, which is just below pre-crisis levels. It remains to be seen whether momentum can be maintained with stimulus measures waning, stores re-closing due to accelerating infection rates and high joblessness.

US and Aussie corporate reporting seasons

  • In the coming week, US companies will continue to report earnings results for the second quarter (Q2, or June quarter). Companies scheduled to report quarterly earnings results in the coming week, include: Occidental Petroleum; Marriott; Nautilus; Simon Property Group; Macerich; Cisco; Alibaba; J C Penney; and Kraft Heinz.
  • Meanwhile the Australian profit reporting season continues (year to June or half-year to December), including:
  • On Monday: Aurizon Holdings; GPT Group.
  • On Tuesday: Challenger; James Hardie; Shopping Centres Australasia Property Group.
  • On Wednesday: SEEK; Transurban; CBA; Computershare; Downer EDI; Magellan Financial Group.
  • On Thursday: AMP; Treasury Wine Estate; Breville; Telstra; Evolution Mining; AGL Energy; Woodside Petroleum; Goodman Group; QBE Insurance.
  • On Friday: Baby Bunting; Newcrest Mining; Iluka Resources.

 

Published by Ryan Felsman, Senior Economist, CommSec