Australia: Lockdowns to test Reserve Bank resolve
- In the coming week, the Reserve Bank (RBA) will be front-and-centre of investors’ minds with the Board due to provide updates on its policy settings and latest economic forecasts.
- But the week kicks-off on Monday when manufacturing purchasing managers’ indexes (PMIs) are issued by both IHS Markit and the AiGroup for July. And the Melbourne Institute inflation gauge for the same month is also scheduled.
- Also on Monday, CoreLogic issues the Home Value Index – the most timely and comprehensive measure of Australian home prices. Most focus will be on whether lockdowns across Sydney and Melbourne in July slow the rapid pace of home price growth.
- On Tuesday, a slew of economic data releases are scheduled, including ANZ/ Roy Morgan weekly consumer confidence survey with building approvals, lending indicators and regional internal migration figures.
- Also on Tuesday, the RBA takes centre-stage when the Board hands down its monetary policy decision at 2.30pm AEST. Since the Board last met on July 6, the near-term economic outlook has deteriorated due to extended virus lockdowns, particularly in Sydney and Melbourne. Commonwealth Bank (CBA) Group economists expect the RBA Board to reverse the decision to slow or ‘taper’ its bond buying program from mid‑September.
- On Wednesday, the Bureau of Statistics (ABS) issues final estimates of retail spending for June with most focus on the June quarter real (inflation-adjusted) retail trade figures. Preliminary retail sales fell by 1.8 per cent in June.
- Also on Wednesday, new vehicle sales are likely to be heavily impacted by the closure of car showrooms and dealerships in July because of government social distancing measures. The ABS releases its “Selected Living Cost Indexes” publication for the June quarter. And services gauges from both IHS Markit and the AiGroup are also due.
- On Thursday, June international trade data will feature alongside the weekly payroll jobs and wages update for the period ended July 17. Job losses are expected to be concentrated in regions that have been shut down.
- On Friday, the RBA releases its Statement on Monetary Policy. All eyes with be on the updated forecasts for economic growth, inflation and the labour market (unemployment rate and wage growth). And RBA Governor Lowe provides testimony to the House of Representatives Standing Committee on Economics at 9.00am AEST.
Overseas: US jobs data steals the limelight
- The July jobs data (issued Friday) is the highlight on the US economic calendar in the coming week.
- The week kicks-off in China on Monday when the Caixin private sector manufacturing index is issued for July.
- On Monday in the US, manufacturing PMIs from both IHS Markit and the Institute of Supply Management (ISM) are released for July with construction spending figures for June. Supply constraints are impacting manufacturing activity, while economists expect construction spending to lift 0.5 per cent in June after the 0.3 per cent fall in May.
- On Tuesday, the June factory orders figures are scheduled with the IBD/TIPP economic optimism index, Ward’s motor vehicle sales report (subject to date change) and the weekly Johnson Redbook chain store sales figures.
- On Wednesday in China, the focus will be on the Caixin services gauge which fell to 14-month lows in June.
- On Wednesday in the US, weekly mortgage application data from the Mortgage Bankers Association (MBA) is scheduled with the IHS Markit and the ISM services gauges, and the ADP private sector employment report.
- On Thursday, weekly data on claims for unemployment benefits (initial jobless claims) are issued with the international trade balance and Challenger job cuts report. There were just 20,476 planned job cuts in June – the fewest in 21 years. The US trade deficit could edge higher from US$71.2 billion to US$71.5 billion in June.
- On Friday, the pivotal non-farm payrolls (the monthly jobs report) will be issued for July. Economists tip a gain in employment of around 925,000 with the jobless rate estimated to have eased from 5.9 per cent to 5.7 per cent.
- Also on Friday, consumer credit data for June is due. Consumer borrowing jumped by the most on record in May.
- On Saturday in China, international trade data is scheduled. Global demand for Chinese goods remains robust with exports in US dollar terms up 32.2 per cent in June from a year earlier, while imports jumped 36.7 per cent.
US corporate earnings season
- The US corporate earnings season begins to wind down. Companies to report this week include: Beyond Meat; Loews; Unisys (Monday). Philips 66; Alibaba; Allegheny Technologies; Eli Lilly; Avis Budget; Amgen (Tuesday). Albemarle; Century Aluminium (Wednesday). American International Group; Bombadier; Duke Energy (Thursday). Lear; Century Casinos (Friday).
Australian profit reporting season
- The Aussie company profit reporting season kicks-off in early August. ASX-listed companies to report this week include: Elixir Energy; Pinnacle Investment Management (Monday). Genworth Mortgage Insurance Australia; Credit Corp Group; Centuria Office REIT (Tuesday). BWP Trust; Centuria Industrial REIT; Charter Hall Long WALE REIT; REA Group; Nick Scali (Wednesday). Resmed (Thursday).