Australia: One year ends, another begins

  • The coming week will be littered with reports looking back on the 2020/21 financial year and looking forward to 2021/22. The past year has been a surprisingly positive one for the Australian economy. And, providing virus cases are suppressed and more people ‘get the jab’, there is plenty to look forward to over the next year.
  • The week kicks off on Tuesday, with ANZ and Roy Morgan jointly issuing the weekly consumer sentiment survey. Sentiment levels have been constrained in recent weeks in response to small outbreaks of Covid-19 across the country.
  • Also on Tuesday the Australian Bureau of Statistics (ABS) issues the results of a general social survey covering the 2020 year.
  • On Wednesday, the Reserve Bank issues the private sector credit (loans outstanding) data for May. Only home lending is really growing at present.
  • Also on Wednesday the Reserve Bank Governor participates in a panel disussion at the Australian Banking Association conference. The ABS issues data on engineering construction and the motor vehicle census. And APRA releases data on deposits and loans issued by financial institutions.
  • On Thursday, CoreLogic issues the Home Value Index – the timely and comprehensive measure of Australian home prices. So far in June, Australian home prices have lifted by around 1.5 per cent with Sydney up the most (up 2.0 per cent) and Perth prices up just 0.4 per cent.
  • Also on Thursday, the ABS releases data on job vacancies and international trade. Job vacancies were up by 13.7 per cent in the February quarter to record highs. And the trade surplus rose from $5.8 billion to $8 billion in April – the 40th consecutive trade surplus.
  • In addition, on Thursday both AiGroup and HIS-Markit release purchasing manager indexes (PMI) for manufacturing.
  • On Friday the ABS issues the latest “Lending Indicators” publication, containing data on new housing, personal, business and lease loans. In April, the value of new loan commitments for housing rose by 3.7 per cent to a record high of $31.06 billion. Owner-occupier loans were up 4.3 per cent to a record high and investor loans were up by 2.1 per cent to a near 4-year high.

Overseas: US jobs data steals the limelight

  • The June jobs data (issued Friday) is the highlight on the US data calendar in the coming week.
  • The week kicks-off in the US on Monday with the influential Dallas Federal Reserve manufacturing index.
  • On Tuesday in the US, the usual weekly Johnson Redbook chain store sales figures are released with two measures of home prices and the Conference Board consumer confidence index. Separate home price data is provided by S&P/Case Shiller and the Federal Housing Finance Agency. Both measures show that home prices are up 13-14 per cent on a year ago.
  • On Wednesday, the usual weekly mortgage application figures from the Mortgage Bankers Association are scheduled alongside pending home sales and the ADP series of private sector payrolls.
  • Also Wednesday marks the start of a procession of purchasing manager indexes (PMI) in China and the US – incorporating the timely results of surveys conducted of company purchasing managers.
  • In the US the influential Chicago PMI is issued. In China, the National Bureau of Statistics releases both the manufacturing and services PMIs on Wednesday, while the Caixin manufacturing index is issued on Thursday.
  • On Thursday in the US it is the turn of both Markit and the Institute of Supply Management to issue PMIs covering manufacturing.
  • Also on Thursday in the US, weekly data on claims for unemployment benefits (initial jobless claims) are issued with Challenger job cuts and construction spending.
  • On Friday, the pivotal non-farm payrolls (the monthly jobs report) will be issued for June. Investors will be closely dissecting all parts of the report including measures on employment, wages, hours worked and the jobless rate.
  • Economists tip a gain in jobs of around 600,000 with the jobless rate estimated to have eased from 5.8 per cent to 5.7 per cent.
  • Also on Friday in the US, the international trade figures for May are issued together with factory orders.

Originally published by Craig James, Chief Economist, CommSec