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Australia: Spotlight on business investment data

  • In the coming week, June quarter data on construction activity and business investment will be adversely impacted by the virus lockdown over April and May. But weekly card spending, consumer confidence, jobs and wages figures will provide a timelier update on the health of the economy.
  • The week starts on Monday when the Bureau of Statistics (ABS) releases the “Household Impacts of COVID-19 Survey” for June.
  • On Tuesday weekly indicators are issued, including Commonwealth Bank (CBA) data on credit and debit card spending, the ANZ-Roy Morgan consumer sentiment index and the ABS payroll jobs & wages figures.
  • Also on Tuesday preliminary international trade data for July is scheduled. Iron ore shipments from Western Australia’s Port Hedland hit record highs during the month.
  • On Wednesday the Australian Bureau of Statistics (ABS) releases the “Construction Work Done” The report is important as the data on residential work is an input into the economic growth calculations. In the June quarter, CBA Group economists expect that construction work fell by 7.5 per cent with residential and commercial building activity hampered by COVID-19 related government restrictions.
  • On Thursday, the ABS releases the report: “Private New Capital Expenditure and Expected Expenditure.” The report includes data on business capital spending (buildings and equipment) and forecasts for spending over the next year. Forward-looking investment intentions data for 2020/21 deteriorated sharply in the March quarter report. CBA Group economists expect that investment declined by around 8.6 per cent in the June quarter.
  • Also on Thursday the ABS issues the August Business Impacts of COVID-19” Topics covered in the phone survey include business revenue, operating expenses, employment and COVID-19 policy support measures.
  • On Friday, the ABS provides the latest estimates of regional population by age and sex for 2019.

Overseas: US economic growth data features

  • The main standout in terms of the coming week’s economic data is the second estimate of US economic (GDP) growth for the June quarter. Data on personal income and spending will also be of interest to investors.
  • On Monday in the US the Chicago Federal Reserve National Activity index for July is released.
  • On Tuesday, data on home prices are released by both S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA). The FHFA house price index is tipped to lift by 0.4 per cent in June.
  • Also on Tuesday, the Conference Board issues the consumer confidence index while the influential Richmond Fed manufacturing index, new home sales figures and the weekly Johnson Redbook chain store sales report are all scheduled. Consumer confidence could edge higher to 93.2 in August from 92.6 in July. But new home sales are expected to ease by 0.1 per cent in July to 775,000 units after a 13.8 per cent lift in June.
  • On Wednesday, data on durable goods orders – a proxy for business investment – is issued with the usual weekly data on US mortgage applications from the Mortgage Bankers Association (MBA). Durable goods orders are tipped to lift by 4 per cent in July, following a 7.3% pick up in June on the back of a surge in motor vehicle orders.
  • On Thursday in China, industrial profits data is scheduled for July with a continued improvement expected.
  • On Thursday in the US, the weekly data on jobless claims (unemployment benefits) will dominate market attention, as will the second estimate of June quarter economic (GDP) growth. The US economy shrunk by 9.5 per cent in the quarter with the annualised rate down by 32.9 per cent – the most since the March quarter of 1946. Data on pending home sales for July and the August Kansas Fed manufacturing index are also scheduled.
  • On Friday in the US, personal income and spending figures are issued with the US Federal Reserve preferred inflation measure – the core Personal Consumption Expenditure (PCE) deflator. Expanded unemployment insurance continue to be a support to income and spending.
  • Finally on Friday in the US, the goods trade balance, wholesale inventories, consumer sentiment and the Chicago purchasing managers’ index round-out a busy week.

Australian corporate reporting season

  • The Aussie profit reporting season enters its penultimate week (companies reporting for the year or half-year to June). Amongst those scheduled to report, include:
  • On Monday: Fortescue Metals; nib Health; Senex Energy; Amayism; St Barbara; Super Retail Group; Monash  IVF; AUB Group; Infomedia; Reliance Worldwide.
  • On Tuesday: Bingo Industries; Blackmores; Seven West Media; Scentre Group; Ansell; Stockland; Oil Search; Alumina; Qube Holdings; Ampol; Bingo Industries; HUB24.
  • On Wednesday: Ridley Corp.; Adbri; Reece; IOOF; Seven; Whitehaven Coal; Adairs; WorleyParsons; Adelaide Brighton; APA Group; AP Eagers; Cleanaway Waste Management; FlexiGroup; Platinum Asset Management; Steadfast.
  • On Thursday: Appen; Woolworths; Afterpay; Nine Entertainment; Zip; Link Administration; Independence Group; Ardent Leisure; Ramsay Health; Atlas Arteria; Flight Centre; Sandfire Resources.
  • On Friday: Openpay; Village Roadshow; Boral; Costa Group.

Published by Ryan Felsman, Senior Economist, CommSec