Australia: Jobs data is the highlight
- The highlight in the coming week is the June jobs data. But both consumer and producer sentiment gauges vie for attention.
- The week kicks-off on Monday when the Australian Institute of Petroleum (AIP) issues the weekly data on petrol prices. And Datium Insights issues the weekly update on used cars prices. Meanwhile, the Australian Bureau of Statistics (ABS) issues regional data on dwelling approvals (council approvals to build new homes).
- On Tuesday, the highlight is the NAB business survey for June. In May, Aussie business conditions were the strongest on record with firms enjoying the best trading, profitability, forward orders and employment conditions since the NAB series began in March 1997.
- The NAB business confidence index eased from a record high in May and recent virus lockdowns could weigh on sentiment in June. But with conditions so strong, investors will be closely assessing the June survey for signs of stress such as shortages of labour and materials as well as pricing pressures.
- Also on Tuesday, ANZ and Roy Morgan jointly issue the weekly consumer confidence survey. Optimism has been dented in recent weeks due to virus flare ups across the country. And the ABS releases the final estimates of overseas arrivals and departures for May.
- On Wednesday, the ABS publishes the March quarter Building Activity publication that includes new figures on dwelling starts. With building approvals soaring, this will be reflected in the next stage of activity – the commencement of the building work. The ABS also releases provisional overseas travel statistics for June with the pause in the Trans-Tasman travel bubble expected to weigh on arrivals and departures. And the latest “Household Impacts of Covid-19” survey is published for June.
- Also on Wednesday, Westpac and the Melbourne Institute issue the July monthly survey of consumer confidence. Confidence fell by 5.2 per cent to a 5-month low of 107.2 in June.
- On Thursday, the ABS releases the June Labour Force publication. In May, employment soared by 115,200 in May. The unemployment rate fell from 5.5 per cent to a 17-month low of 5.1 per cent.
- The monthly report on consumer inflation expectations from the Melbourne Institute will also get some attention on Thursday.
Overseas: US inflation and Chinese economic growth dominate the data docket
- In the US, data on consumer and producer prices will be released with industrial production and retail sales. In China, the June ‘data download’ is scheduled for Thursday with second quarter economic growth (GDP) figures.
- The week kicks-off in the US on Monday when the Federal Reserve Bank of New York issues the June data on consumer inflation expectations. In May, expectations stood at a record high of 4.0 per cent.
- On Tuesday in China, exports are tipped by economists to lift 21.3 per cent in June when compared with a year ago with imports 28.5 per cent higher on a year ago. A trade surplus of US$44.9 billion is expected.
- On Tuesday in the US, the weekly Johnson Redbook chain store sales figures are released with consumer prices (CPI), the NFIB small business optimism index and the monthly budget statement. The ‘core’ CPI may have lifted by 0.4 per cent in June to an annual rate of 4.0 per cent, driven by ‘transitory’ re-opening-sensitive categories.
- On Wednesday, the usual weekly mortgage application figures from the Mortgage Bankers Association (MBA) are scheduled with the producer price index (PPI). The PPI is tipped to have lifted 0.5 per cent in June after a 0.8 per cent rise in May. But the annual PPI rate may have lifted from 6.6 per cent to 6.8 per cent.
- Also on Wednesday, the US Federal Reserve issues its latest Beige Book update on current economic conditions.
- On Thursday, weekly data on initial jobless claims is issued with regional manufacturing surveys, the Empire State index and Philadelphia Fed index and industrial production data. Production may have lifted 0.6 per cent in June. And US Federal Reserve Chair Jerome Powell delivers semi-annual testimony to a US Senate banking panel.
- On Thursday in China, the June quarter economic growth (GDP) figures are released with the June ‘data download’. Economists expect GDP to have expanded by 1.2 per cent in the June quarter, but the annual GDP growth rate to decelerate (‘normalise’) from 18.3 per cent in the March quarter to 8.0 per cent in the June quarter. The monthly indicators include production, investment, retail spending, home prices and unemployment.
- On Friday in the US, the June reading of retail sales is scheduled with spending expected to continue to ease (down 0.1 per cent) from the stimulus-charged boost in March. Consumers are also exhibiting a preference towards services away from goods as the US economy re-opens. And the preliminary consumer sentiment data from the University of Michigan is scheduled with confidence tipped to improve from 85.5 to 86.5 in July.
US corporate earnings season: Banks in focus
- JPMorgan Chase; Goldman Sachs; Wells Fargo; PepsiCo (Tuesday). Bank of America; BlackRock; Citigroup; Delta Air Lines (Wednesday). Alcoa; Bank of New York Mellon; Morgan Stanley; UnitedHealth Group (Thursday).
Originally published by Craig James, Chief Economist, CommSec