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Australia: Jobs and confidence indicators in focus

  • Australian financial markets are closed to observe the Easter Monday While most focus will be on the Bureau of Statistics’ (ABS) labour force survey, business and consumer confidence indicators will also generate plenty of investor attention.
  • On Tuesday, NAB issues its monthly business survey. The spread of the coronavirus (COVID-19), containment measures, shutdowns and increasing economic uncertainty are expected to contribute to a further deterioration in business confidence and conditions in March.
  • Also on Tuesday, the Commonwealth Bank issues its March Household Spending Intentions report – detailing trends in consumer spending using Google data. And the Reserve Bank of Australia’s estimates of February credit and debit card lending are due.
  • On Wednesday, Roy Morgan and ANZ will release the timely weekly reading of consumer sentiment. Around an hour later, Westpac and the Melbourne Institute both issue the April consumer confidence survey. Sentiment hit 5-year lows in March.
  • That said, the Federal government’s recently announced $130 billion ‘JobKeeper’ wage subsidy package could cushion the blow for Aussie workers that have been stood down due to virus-enforced business shutdowns.
  • Also on Wednesday, the ABS issues February tourism and December quarter building and construction activity data. COVID-19 international travel restrictions weren’t universally imposed by the Federal government until March 18, but a plunge in Chinese visitors is expected as the virus crisis escalated in Wuhan and beyond during February.
  • On Thursday, the Melbourne Institute provides an update on consumer inflation expectations for April. And the all-important March labour force survey is issued by the ABS. While the ‘JobKeeper’ package is expected to keep a lid on overall job losses, around 950,000 casual workers are ineligible for the payment, according to BankWest and Curtin University economists. And government payments won’t flow through to businesses until May 1. A lift in the jobless rate from 5.1 per cent in February to 5.4 per cent in March is forecast by economists.

Big week for Chinese economic data and the ongoing fight against COVID-19

  • Investors will continue to monitor developments in the fight against COVID-19 – especially in the US, UK and Europe – where the death toll tragically mounts. A plethora of US economic data is issued – headlined by retail spending. But all eyes will be on China where economic growth (GDP), home prices, international trade and activity data are all scheduled.
  • Following the Easter holiday break, the week kicks off in China on Monday when new vehicle sales data is scheduled. Sales fell by 80 per cent in February as car dealerships were shut down due to the virus lockdown.
  • On Tuesday in China, international trade data is due. With some Chinese businesses returning to work and able to restart overseas shipments, some improvement in export volumes is expected in March.
  • On Tuesday in the US, the regular weekly reading on US chain store sales is due together with the import and export price indexes. The Federal Reserve Bank of Chicago President, Charles Evans, speaks on current economic conditions and monetary policy.
  • A huge volume of data is scheduled for release on Wednesday in the US. The regular weekly data on mortgage applications is released along with retail sales, industrial production, capital flows and business inventories data. The Federal Reserve Beige Book on regional US economic conditions is scheduled. The New York Federal Reserve issues its Empire State gauge of manufacturing activity and the National Association of Homebuilders (NAHB) provides an update on homebuilder sentiment – both for April.
  • The update on retail spending is of most interest to investors. Widespread pandemic closures of US shopping malls and department stores – combined with self-isolation measures – are expected to hit retail spending in March. A sharp 3 per cent decline in ‘bricks and mortar’ sales is expected by economists.
  • On Thursday in China, home prices are tipped to lift by 5.2 per cent from a year ago in March.
  • On Thursday in the US, weekly data on new claims for unemployment insurance (jobless claims) is issued with data on housing starts and building permits. The Philadelphia Federal Reserve also releases the April manufacturing index. The initial jobless claims figures are clearly the most important data to watch. Claims could be as high as 8.72 million for the week ended April 11 due to the global virus crisis.
  • On Friday in China, the much-anticipated March quarter economic growth (GDP) data is scheduled along with the monthly activity figures for retail sales, investment and production. A recent survey of 62 economists – conducted by Bloomberg over March 20-25 – shows that on average a 5.1 per cent contraction in Chinese GDP growth is forecast in the March quarter from a year ago due to the virus halt to economic activity.
  • Over the three months to March from a year ago, annual growth rates for industrial production (down 3 per cent), retail sales (down 6.5 per cent) and fixed asset investment (down 14 per cent) are all tipped to pick up from the record lows posted in February.
  • And on Friday in the US, the Conference Board’s leading index is expected by economists to decline by 7 per cent in March.

Published by Ryan Felsman, Senior Economist, CommSec