Australia: Key Reserve Bank officials to speak

Business investment is the key data highlight in the week ahead while two Reserve Bank senior officials deliver speeches.

And the week kicks off on Monday with a speech by Christopher Kent, Assistant Governor (Financial Markets) at the Reserve Bank, at the KangaNews DCM Summit 2022. And in economic data, the Australian Bureau of Statistics (ABS) releases the household spending indicator – a measure of spending using banks transaction data.

On Tuesday, Roy Morgan and ANZ jointly issue the weekly consumer sentiment index. S&P Global issues the ‘flash’ purchasing manager survey results for May. And the ABS issues three separate reports on the job market including one on Participation, job search and mobility.

On Wednesday, the ABS releases data on construction work done in the March quarter with the residential work figures providing a key input into the calculation of economic growth. The ABS also issues two publications: Housing occupancy and costs and Household income and wealth. Both reports are for the 2019/20 year.

The detailed data on skilled job vacancies is also issued on Wednesday including regional and occupation figures.

Also on Wednesday, investors will monitor a speech by Luci Ellis, Assistant Governor (Economic), at the Reserve Bank at the UDIA 2022 National Conference in Sydney.

On Thursday, the ABS issues business investment data (Private new capital expenditure and expected expenditure)together with detailed labour force estimates for themonth of April and the Business conditions and sentiments publication.

And on Friday the ABS releases the preliminary estimates of retail spending for April. Aussies are spending freely with retail trade at record highs in nominal and real terms in March. In fact nominal spending in March was up 9.4 per cent over the year.

Also on Friday the ABS issues annual industry financial statistics for the 2020/21 financial year.
Overseas: US economic activity data amongst the highlights

In the coming week, a raft of indicators vie for attention in the US including economic growth and influential inflation readings.

The week kicks-off on Monday in the US with the publication of the national activity index from the Chicago Federal Reserve. The index has fallen for the last two months.

On Tuesday, the weekly Johnson Redbook chain store sales data is issued in the US alongside the ‘flash’ (preliminary) readings of purchasing manager indexes (PMI) from S&P Global, new home sales and the Richmond Federal Reserve manufacturing index. The manufacturing and services PMI remain above 50, signifying expansion with manufacturing activity at 7-month highs.

On Wednesday, the US Federal Reserve releases minutes of the recent Open Market Committee (FOMC) meeting with data on durable goods orders issued alongside weekly mortgage applications data from the Mortgage Bankers Association. The FOMC minutes may provide guidance on the size of future rate increases.

On Thursday in the US the second estimate of economic activity (GDP) for the March quarter is released. The advance reading reading showed the US economy contracting by 1.4 per cent following a solid 6.9 per cent expansion in the December quarter.

Also on Thursday in the US, the usual weekly figures on claims for unemployment insurance (that is, initial jobless claims) will be issued with pending home sales.

In China on Friday, data on industrial profits is released with profits in March up 8.5 per cent on a year ago.

In the US on Friday personal income & spending figures are issued with the goods trade balance, retail & wholesale inventories and consumer sentiment. The personal income data is the highlight, but not for income and spending data, but rather for the key inflation reading – the personal consumption expenditure (PCE) deflator. In March, the core PCE deflator (excludes food and energy) rose by 0.3 per cent to stand 5.2 per cent higher than a year ago.

The final estimate of consumer sentiment for May should confirm the lowest confidence levels in 11 years.

Originally published by Craig James, Chief Economist, CommSec