Australia: Reserve Bank dominates proceedings
- A bevy of economic and financial events ushers in the month of August with the Reserve Bank firmly in the spotlight.
- The week starts on Monday, with CoreLogic to release July data on home prices in its Home Value report. Home prices likely fell by 0.8 per cent in July with declines led by Melbourne (-1.1 per cent) and Sydney (-0.8 per cent). Adelaide home prices were flat and Brisbane prices may have eased just 0.2 per cent.
- Also on Monday, both CBA and AiGroup will release the results of surveys of purchasing managers in the manufacturing sector. And ANZ job ads will garner investor interest with July payrolls falling due to Melbourne’s lockdown.
- On Tuesday, the Reserve Bank Board meets to decide monetary policy measures. There won’t be any changes made to policy but Board members will ‘sign off’ on the latest economic forecasts.
- Also on Tuesday, CBA releases its weekly data on credit and debit card spending and ANZ-Roy Morgan issues the weekly consumer confidence rating. The Australian Bureau of Statistics (ABS) releases retail trade and international trade data.
- On Wednesday, the ABS releases its “Lending Indicators” publication as well as “Selected Living Cost indexes”. CBA & IHS Markit release the July results of its survey of purchasing managers (PMI) in the services sector. And new vehicle sales data is due.
- The living cost indexes show how consumer prices vary with different demographic groups. The PMI should show a lift in economic activity in the services sector in July to 3-year highs.
- On Thursday, the ABS releases “Tourism Satellite Accounts”: experimental March quarter tourism labour statistics. Given that the tourism sector has been hard hit by COVID-19, this early data will be of significant interest. The AiGroup construction sector gauge is also scheduled.
- On Friday, the Reserve Bank releases the Statement on Monetary Policy. While the report contains comprehensive analysis of domestic and international economies and financial markets, the main interest is in the latest economic forecasts. The AiGroup issues the Performance of Services index for July.
- Also on Friday, the Reserve Bank Assistant Governor (Economics) Luci Ellis elaborates on the latest forecasts in a webinar to the Australian Business Economists.
Overseas: Jobs, jobs, jobs
- US jobs data is in the spotlight in the coming week together with surveys of purchasing managers.
- The week kicks off in China on Monday when Caixin releases its purchasing managers’ index (PMI) for the manufacturing sector. The PMI is expected to remain steady around 51.3, signalling an expansion in activity.
- And in the US on Monday, the Institute of Supply Management (ISM) releases its manufacturing PMI while Markit releases its version of the same index.
- Also on Monday data on construction spending for June is issued while figures on total vehicle sales are also scheduled.
- On Tuesday, the ISM New York index, factory orders and the IBD/TIPP economic optimism index are all released with weekly Johnson Redbook chain store sales figures.
- Factory orders are tipped to increase 5 per cent in June after the 8 per cent lift in May. And the August economic optimism index may have eased from +44 to +42 points.
- On Wednesday the usual weekly data on US mortgage applications from the Mortgage Bankers Association (MBA) is issued together with the ADP measure of private sector payrolls, international trade (exports and imports) and the rival PMIs for the services sector from ISM and IHS Markit.
- Similarly in China on Wednesday Caixin will issue its purchasing managers’ index for the services sector.
- On Thursday, the weekly data on jobless claims are issued with the Challenger series of job cuts.
- On Friday in China, the July international trade data is expected. In June, imports were up 2.7 per cent on the year while exports lifted 0.5 per cent. The ‘health’ of the external sector will be of particular interest to investors.
- And on Friday in the US, the July labour force figures are issued. Most investors are interested in the employment data or non-farm payrolls. After rising by 4.8 million jobs in June, another 2 million lift in jobs is expected in July. The unemployment rate is tipped to ease from 11.1 per cent to 10.2 per cent.
US And Australian corporate reporting seasons
- In the coming week, US companies will continue to report earnings results for the second quarter (Q2, or June quarter). Meanwhile the early reports for the Australian season are released (year to June or half-year to December).
- In Australia, BWP Trust is slated to report on Tuesday with ResMed on Wednesday and REA Group and IAG on Friday.
CommSec Senior Economist Ryan Felsman previews the economic & financial market events scheduled for the week ahead including the Reserve Bank Board meeting, Statement on Monetary Policy & US Non-farm payrolls.