Australia: Jobs data dominates
- In the coming week, there is plenty for investors to watch, including a speech from the Reserve Bank Deputy Governor, the September jobs data and business and consumer sentiment surveys.
- The week kicks-off on Tuesday when ANZ and Roy Morgan jointly release the weekly consumer confidence index.
- Also on Tuesday, the National Australia Bank (NAB) issues the September business survey. Larger Aussie businesses were resilient in August with both confidence and conditions improving, despite prolonged lockdowns in Australia’s south-east. The more upbeat tone likely reflects the healthy economic momentum prior to the latest shutdowns, ongoing policy stimulus as well as greater certainty that restrictions will end as vaccination targets are met.
- In a busy day on Tuesday, the Australian Bureau of Statistics (ABS) releases two separate publications: “Labour Force Status of Families” and “Update to measuring the Consumer Price Index in the September quarter.”
- On Wednesday, the Melbourne Institute and Westpac release the October month consumer confidence report. The consumer sentiment index rose by 2 per cent in September to 106.2 points, up from an 11-month low in August, with “the improving vaccine situation” a key factor in the lift in confidence, according to Westpac economists.
- Also on Wednesday, the ABS provides two separate updates: “Overseas Arrivals and Departures” (August) and “Building Activity” (June quarter). At the end of March 2021 a record 75,824 houses were being built across Australia.
- On Thursday, the ABS issues the September employment report. CBA Group economists expect that the data will show around 200,000 job ‘losses’ nationally with the unemployment rate lifting from a 12½-year low of 4.5 per cent to 5 per cent and the participation rate down from 65.2 per cent to 5 per cent. But most attention will be on key measures of labour demand during lockdowns, including hours worked and the underemployment rate.
- Also on Thursday, Reserve Bank Deputy Governor Guy Debelle delivers an online speech – “Climate Risks and the Australian Financial System”– to the CFA Australian Investment Conference – at 9am AEDT. And the Melbourne Institute measure of consumer inflation expectations over the next 12 months is released for October.
- On Friday, the ABS will release the “Monthly Business Turnover Indicator” report, which is expected to provide a timely update on business sales or turnover in August using Australian Taxation Office data.
Overseas: Inflation in focus
- In the coming week, the focus is on inflation readings in both China and the US.
- On Monday, US bond markets are closed in observance of Columbus Day. Major US sharemarkets are still open.
- On Tuesday in the US, the Johnson Redbook weekly data on chain store sales is issued with the National Federation of Independent Business (NFIB) Small Business Optimism index, the US Bureau of Labor Statistics’ JOLTS job openings report and the Federal Reserve Bank of New York consumer inflation expectations gauge.
- On Wednesday in China, international trade data is issued for September with a US$47 billion surplus expected.
- On Wednesday in the US, weekly US mortgage applications data from the Mortgage Bankers Association (MBA) is scheduled with the consumer prices. Economists expect that prices rose by up to 0.3 per cent in September.
- Also on Wednesday, the US Federal Reserve issues minutes of the September 21-22 meeting. At the meeting, Chairman Jerome Powell said the tapering of the Fed’s monthly bond purchases “may soon be warranted.”
- On Thursday in China, both consumer and producer prices data are scheduled for September. China’s factory-gate inflation accelerated to a 13-year high in August, driven by higher commodity prices and supply disruptions.
- On Thursday in the US, the weekly data on new claims for unemployment benefits (initial jobless claims) are released alongside the monthly budget statement and producer prices data – both for September.
- In a busy end to the week in the US on Friday, data on retail sales, import/export prices, business inventories and consumer confidence are all scheduled along with the New York Empire State manufacturing index.
US corporate reporting season: September quarter 2021
- According to FactSet, corporate earnings for US S&P 500 firms are expected to increase by around 27.6 per cent in the September quarter compared with the year-ago quarter – the third strongest growth rate since 2010.
- As always, the big US banks dominate earnings releases in the first week. Companies scheduled to report on Wednesday: Delta Air Lines; BlackRock; JPMorgan Chase.
- On Thursday: Alcoa; Walgreens Boots Alliance; Bank of America; Citigroup; Wells Fargo; Domino’s Pizza; Morgan Stanley; UnitedHealth Group.
- On Friday: Goldman Sachs; JB Hunt Transport Services.
Originally published by Ryan Felsman, Senior Economist, CommSec