Australia: Inflation in focus

  • In Australia over the coming week, the September quarter readings on inflation will dominate proceedings.
  • But the week kicks off on Monday with the quarterly State of the States report from CommSec. The report details the current economic performance of the states and territories.
  • Also on Monday the Australian Bureau of Statistics (ABS) releases preliminary trade in goods data for September.
  • On Tuesday, the weekly measure of consumer confidence is released by ANZ and Roy Morgan. And Commonwealth Bank (CBA) issues its fortnightly report of credit and debit card spending.
  • Also on Tuesday Reserve Bank Assistant Governor Michele Bullock (Financial System) speaks to the Ayr Chamber of Commerce. Investors are trying to grab hints on monetary policy easing measures that may be delivered at the November 3 Board meeting.
  • On Wednesday, the ABS releases the September quarter Consumer Price Index – the main measure of inflation.
  • After falling by 1.9 per cent in the June quarter – the most in 89 years – prices are tipped to rise by 1.4 per cent, lifting the annual rate from -0.3 per cent to 1.0 per cent. The trimmed mean (underlying measure) is tipped to rise by 0.6 per cent in the quarter and by 1.4 per cent over the year.
  • Also on Wednesday the ABS releases Provisional Mortality Statistics for the January-July period.
  • On Thursday, the ABS releases data on export and import prices with oil, iron ore, LNG and coal prices the key influences along with the Australian dollar.
  • Also on Thursday, the ABS releases quarterly data on business counts for the 2019/20 financial year. This data has been fast-tracked to highlight the impact of COVID-19 on the business sector.
  • And on Friday, the ABS releases data on business inflation – the Producer Price Indexes. The Reserve Bank also releases private sector credit (or loans outstanding) data.

Overseas: US economic growth and housing in spotlight

  • In the coming week investors will get the first look at the September quarter US economic growth figures. A raft of US housing market indicators will also be released.
  • On Monday, the Chicago Fed national activity and Dallas Fed manufacturing indexes are both scheduled with new home sales data. Economists expect sales to fall 0.1 per cent to an annual rate of 1.01 million in September.
  • On Tuesday, the weekly Johnson Redbook chain store sales figures are released with durable goods orders (a measure of business investment) and consumer confidence data. There are two measures of home prices – from the FHFA and S&P/Case Shiller. And the influential Richmond Fed manufacturing index is issued.
  • In China on Tuesday, data on industrial profits is released for September.
  • On Wednesday in the US, the weekly data on US mortgage applications from the Mortgage Bankers Association (MBA) is due with wholesale inventories and the advance data on exports and imports of goods in September.
  • On Thursday, data on weekly claims for unemployment benefits (initial jobless claims) are issued together with the first look at economic growth data for the September quarter and pending home sales. After falling at an annualised rate of 31.4 per cent in the June quarter, a 32 per cent rebound is tipped to be recorded for the September quarter by economists surveyed by Bloomberg.
  • On Friday, data on personal income and spending is released with the Chicago purchasing managers’ index, employment cost index (wages and benefits) and the final University of Michigan reading of consumer sentiment. Personal income may have lifted 0.5 per cent in September with spending up 1 per cent. Accompanying the data on income and spending is the key inflation measure – the personal consumption expenditures (PCE) deflator. The core measure may have risen by 0.2 per cent.
  • In China on Saturday, the National Bureau of Statistics releases the survey results for purchasing managers in the manufacturing and services sectors. Services activity expanded in September, holding at a solid 55.9 points.

Financial markets: US corporate reporting season

  • The third quarter (September quarter) corporate reporting season continues in the US. Amongst companies tipped to report on Monday: Restaurant Brands; Crane.
  • On Tuesday: 3M; BP; Caterpillar; Corning; Eli Lilly; Harley Davidson; Jet Blue Airways; Merck; Novartis; Pfizer; Raytheon Technologies; Advanced Micro; Genworth Financial; Microsoft.
  • On Wednesday: Boeing; Bunge; Garmin; General Electric; MasterCard; UPS; eBay; Ford Motor; Gilead Sciences; Visa.
  • On Thursday: Alibaba; ConocoPhillips; Janus Henderson; Kraft Heinz; Royal Caribbean; Yum Brands; Alphabet; Apple; Atlassian; Facebook; MGM Resorts; ResMed; Twitter.
  • On Friday: Altria; Chevron; Exxon Mobil.

Published by Craig James, Chief Economist, CommSec