Australia: The ‘winter whirlwind’
- A strange quirk with the economic calendar is that each change of seasons is ushered in with a barrage of economic and financial events. So we have the ‘winter whirlwind’. Almost two dozen data releases or events are scheduled over the week with 15 data releases from the Bureau of Statistics (ABS) alone.
- But the week kicks off on Monday with private sector credit data (loans outstanding) from the Reserve Bank (RBA) and Melbourne Institute’s monthly inflation gauge.
- On Tuesday, the Reserve Bank Board meets but no change in monetary settings is expected. The RBA may give its expectation of the economic growth figures to be released the following day. The Board’s government bond buying and 3-year yield curve target programs are key issues for investors ahead of the July meeting.
- In terms of economic data released on Tuesday, the highlight is probably the CoreLogic report on Australian home prices for May. Capital city prices may have lifted another 2 per cent in the month.
- Included in the ABS data releases on Tuesday are business indicators; government finance; balance of payments; and building approvals. Both AiGroup and IHS Markit release results of separate surveys of purchasing managers in manufacturing. And ANZ and Roy Morgan jointly issue the weekly consumer sentiment survey.
- On Wednesday the ABS issues the March quarter national accounts with the main focus being the estimate of gross domestic product (GDP or economic activity). In March quarter 2020 the economy contracted by 0.3 per cent. In the March quarter just past the economy may have lifted by 1.0 per cent. That means economic activity would be restored to where it was a year ago.
- The Federal Chamber of Automotive Industries will release the May new vehicle sales data on Wednesday. IHS Markit will release the final May results of surveys of purchasing managers in the services sector. And also on Wednesday, Bradley Jones, Head of Economic Analysis at the RBA delivers a resources sector-focused speech.
- On Thursday, the ABS issues the final international trade (exports and imports) report for April with the final estimate of retail trade for April. The trade accounts are solidly in surplus while data should confirm that retail trade rose 1.1 per cent in April after a 1.3 per cent gain in March.
- On Friday, the ABS issues the latest lending indicators publication that shows new lending commitments covering housing, personal, business and lease loans. Home lending commitments are at record highs.
Overseas: US jobs data steals the limelight
- The coming week sees the usual barrage of purchasing manager survey results across the globe. And the feature of the week is the US non-farm payrolls (employment) data release on Friday.
- In the United States the week kicks off on Monday with the Memorial Day holiday.
- Meanwhile in China on Monday, the National Bureau of Statistics releases results of surveys of purchasing managers in both the manufacturing and services sectors. The private sector Caixin group release its results of a survey of purchasing managers in manufacturing on Tuesday with the services sector survey results on Thursday.
- On Tuesday in the US, both the Institute of Supply Management (ISM) and IHS Markit releases results of separate surveys of purchasing managers in the manufacturing sector. Factory prices paid will be in focus.
- Also on Tuesday in the US, data on construction spending is issued while the IBD/TIPP economic optimism survey for June is issued with the Dallas Federal Reserve manufacturing index and new vehicle sales data.
- On Wednesday the weekly Johnson Redbook chain store sales figures are released with the weekly mortgage applications figures from the Mortgage Bankers Association and the Federal Reserve Beige Book.
- On Thursday in the US, the spotlight shines on jobs. The usual weekly data on claims for unemployment benefits (initial jobless claims) is issued with the Challenger survey of job cuts and the ADP survey of private sector payrolls.
- Also on Thursday both the ISM and IHS Markit release results of separate surveys of purchasing managers in the services sector.
- On Friday in the US, the non-farm payrolls data for May is released. To say that the April data disappointed analysts borders on under-statement. Payrolls rose by 266,000 when some forecasters were tipping job gains as high as 1.5 million. The question is whether there is a mismatch between skills possessed by job seekers and those skills sought by employers.
- In May, analysts are tipping a 620,000 lift in jobs with the jobless rate tipped to ease from 6.1 per cent to 5.9 per cent. Also watch wages (average weekly earnings) with a 0.2 per cent increase expected in May after an out-sized 0.7 per cent gain in April.
- Also on Friday, April data on factory orders is issued.
Originally published by Craig James, Chief Economist, CommSec