Australia: Reserve Bank dominates proceedings

  • A bevy of economic and financial events ushers in the month of May with the Reserve Bank firmly in the spotlight.
  • The week kicks off on Monday when IHS Markit and AiGroup both issue manufacturing purchasing managers indexes. The Melbourne Institute inflation gauge is also due with ANZ job advertisements for April. Job ads hit 12-year highs in March.
  • Also on Monday, the April CoreLogic national home value index is scheduled. Home prices could lift around 1.7 per cent in April after jumping 2.8 per cent in March – the fastest pace in 32 years.
  • On Tuesday, the weekly measure of consumer confidence is released by ANZ and Roy Morgan.
  • Also on Tuesday, the Bureau of Statistics (ABS) issues provisional regional migration estimates, international trade and lending indicators data.
  • But the main event on Tuesday for investors will be the Reserve Bank Board meeting. While no changes in policy settings are expected, a preview of the upgraded economic forecasts is likely ahead of Friday’s Statement of Monetary Policy.
  • On Tuesday, the ABS issues lending data for March. Home lending eased in February from record highs. But the value of investor home lending hit 3-year highs of $6.94 million. And on the back of the HomeBuilder scheme, the value of loans for construction to owner-occupiers rose by 4.4 per cent in February to a record high $4.25 billion. Renovation loans rose 8.3 per cent to 11-year highs of $322.4 million. The value of home lending could lift 2.0 per cent in March.
  • On Wednesday, the AiGroup Performance of Construction index, IHS Markit final reading on services activity and an update on new vehicle sales from the Federal Chamber of Automotive Industries all feature. The ABS also issues Building Approvals and its “Selected Living Cost Indexes” for the March quarter.
  • On Thursday, Reserve Bank Deputy Governor Guy Debelle delivers a speech entitled “Monetary Policy during Covid” at the Shann Memorial Lecture in Perth (scheduled for 7pm AEST).
  • And on Friday, the Reserve Bank’s latest economic forecasts take centre stage when policymakers issue the Statement on Monetary Policy. The AiGroup Performance of Services index is also released.

Overseas: US jobs and Chinese international trade data both in focus

  • There are two highlights in the coming week – the US jobs report and Chinese international trade data.
  • On Monday in the US, manufacturing indexes from both IHS Markit and the Institute of Supply Management (ISM) are due with construction spending and new vehicle sales data. Construction spending is tipped to lift 1.8 per cent in March.
  • On Tuesday in the US, the weekly Johnson Redbook chain store sales figures are released with March factory orders and international trade data. The April ISM New York and May IBD/TIPP Economic Optimism indexes are also scheduled. Economists expect factory orders to have increased by 2 per cent in March with the trade deficit broadly unchanged at around US$72 billion.
  • On Wednesday, the weekly Mortgage Bankers Association mortgage applications figures are released with ADP private payrolls data for April. And services gauges from both IHS Markit and ISM are due.
  • On Thursday, labour market data dominates with the release of weekly claims for unemployment benefits (initial jobless claims), the Challenger job cuts report and March quarter readings on nonfarm productivity and unit labour costs. Job cuts fell 86 per cent in March to 30,603 from a year ago – the lowest monthly total since July 2018.
  • In China on Friday, the National Bureau of Statistics releases the latest international trade data for April. Government customs data showed that China’s exports in US dollar terms soared 30.6 per cent in March from a year earlier with imports up 38.1 per cent – the strongest growth in four years.
  • Also on Friday in China, the Caixin private sector services index for April is issued with the preliminary March quarter current account balance data.
  • On Friday in the US, nonfarm payrolls (jobs) may have lifted by 900,000 in April with the unemployment rate easing to 5.8 per cent. And wholesale inventories and trade sales data are issued with consumer credit figures.

Financial markets: US corporate reporting season

  • The US first quarter profit reporting season enters the final stretch with companies scheduled to report including:
  • On Monday: Avis Budget; Beyond Meat; Estee Lauder; Loews; Mosaic.
  • On Tuesday: Amcor; Bunge; Hyatt Hotels; Under Armour; Warner Music.
  • On Wednesday: Albemarle; Barrick Gold; Callaway Golf; ETSY; Fortis; Franco-Nevada; Hilton; Marathon Oil; Marriott; News Corp; PayPal; Roku; Uber Technologies.
  • On Thursday: Alleghany; American International Group; Dropbox; Expedia; GoPro; Kellogg; Unisys; ViacomCBS
  • On Friday: Cameco; Cigna; Enbridge; MoneyGram.

Published by Ryan Felsman, Senior Economist, CommSec