Australia: Business and consumer confidence surveys in focus

· A quieter week is in prospect in Australia after the data deluge in early June. Consumer and business sentiment surveys are scheduled, with underlying measures of producer and consumer prices in focus. Jobs data will also be a highlight following the JobKeeper wage subsidy expiry. Job vacancies are elevated but skills shortages are emerging.

· The week kicks off on Monday with the ANZ job advertisements figures for May. Ads rose by 4.7 per cent in April to a 12-year high of 196,612 available positions.

· Also on Monday, the Reserve Bank (RBA) releases April credit and debit card lending data.

· On Tuesday, ANZ and Roy Morgan jointly issue the weekly consumer sentiment survey.

· Also on Tuesday, the NAB business survey for May is issued. In April, Aussie business confidence and conditions hit series highs with underlying measures of trading, employment and profitability all at the highest levels since March 1997. Producer price pressures are building amid supply disruptions and raw material shortages. And measures of labour costs will be closely monitored by economists amid reported skills shortages in some sectors of the economy.

· On Wednesday attention turns to the Westpac and Melbourne Institute monthly consumer confidence survey. In May, sentiment eased from the 11-year high set in April, but consumer unemployment expectations hit a decade low amid better job security and prospects. That said, the latest Covid-19 lockdown in Melbourne could weigh on sentiment in June.

· Also on Wednesday, the Bureau of Statistics (ABS) issues the weekly payroll jobs and wages figures for the fortnight to May 22. Payrolls have eased since the JobKeeper expiry in late March, but seasonal factors – such as the Easter and Anzac Day holidays – have also impacted the data. The ABS also releases data on jobs, persons, hours and payments in the Labour Account report as at March.

· And Reserve Bank Assistant Governor (Financial Markets) Christopher Kent delivers an online speech on Wednesday at The KangaNews Debt Capital Markets Summit at 9.30am AEST.

· On Thursday, the Melbourne Institute issues the consumer inflation expectations survey for June.

Overseas: Inflation data steals the limelight

· The coming week sees inflation data come into even sharper focus with measures of consumer prices issued in both China and the US. International trade data is also scheduled for the world’s two largest economies.

· The week kicks off in China on Monday with the release of May trade data. China’s export growth – up 32.3 per cent in April on a year ago – is supporting the economic recovery amid robust overseas demand.

· On Monday in the US, consumer credit data is scheduled for April. Consumers showed an increased willingness to borrow in March, up 7.4 per cent on an annualised basis, with demand for auto and school loans surging.

· On Tuesday, the weekly Johnson Redbook chain store sales figures are released with the National Federation of Independent Business (NFIB) small business optimism index, the Job Openings and Labor Turnover Summary (JOLTS) report and international trade figures.

· According to the NFIB, optimism among US small businesses rose in April to a 5-month high, but a record 44 per cent of respondents said they were unable to fill advertised job positions, stunting potential sales growth. And in a positive sign for US job seekers, the number of job openings reached a series high (highest since December 2000) of 8.1 million in March, according to the US Bureau of Labor Statistics’ JOLTS report.

· On Wednesday in China, the National Bureau of Statistics (NBS) is scheduled to issue inflation data. China factory gate or producer prices are tipped by economists to surge 8.4 per cent in May from a year ago, driven by upstream and mid-stream industries. But the transmission from higher producer prices to consumer prices should remain contained with consumer prices expected to be up 1.6 per cent in May from a year earlier.

· On Wednesday in the US, the usual weekly mortgage applications figures from the Mortgage Bankers Association (MBA) are scheduled with the final readings on wholesale inventories and trade sales for April.

· On Thursday, the spotlight is firmly on inflation data. US consumer prices (CPI) lifted by 0.8 per cent in April – the biggest gain since June 2009 – to be up 4.2 per cent on a year ago. The core CPI rose by 0.9 per cent in April – the most since 1982 – to be 3 per cent higher on a year ago. A more subdued lift in both headline and underlying measures of CPI are expected in May, however, with prices tipped to lift around 0.4 per cent in the month.

· Also on Thursday, weekly data on claims for unemployment benefits (initial jobless claims) are issued with the May budget statement. The US federal budget deficit widened to a record US$1.9 trillion in the first seven months of the fiscal year. The deficit was US$226 billion in April alone, but down from US$738 billion in the same month of 2020.

· On Friday, the preliminary June survey of consumer sentiment from the University of Michigan is due and could lift from 82.9 to 83.3. In May, respondents said they expect inflation to average 4.6 per cent in the next 12 months – the highest in a decade.

· Also scheduled in China is credit growth data. In April, measures of money supply and loan growth slowed as the People’s Bank of China hit the ‘liquidity brakes’, encouraged by China’s economic recovery. But the deleveraging campaign could restrain infrastructure spending and property investment.

Originally published by Ryan Felsman, Senior Economist, CommSec