Australia: End of Financial Year 2022

It’s time for investors to get their tax affairs in order and make their new financial year resolutions as the June 30 deadline approaches. On the data docket, retail spending, job vacancies and home prices headline the Aussie economic calendar.

The week kicks-off on Tuesday, when the weekly consumer sentiment survey results are issued by ANZ and Roy Morgan.

Also on Tuesday, the Australian Bureau of Statistics (ABS) publishes a smorgasbord of Census 2021 data. The ABS also releases population figures as at December 2021, featuring updates on births, deaths and migration for states and territories.

On Wednesday, the ABS provides a preliminary estimate of retail trade in May. Commonwealth Bank (CBA) Group economists expect that retail spending fell by 1.0 per cent in May, as increasingly cautious consumers react to inflationary and interest rate pressures.

On Thursday, the ABS issues two reports: Job Vacancies and Engineering Construction Activity. The total number of job ads hit a record high 423,500 in February, and strong hiring activity likely continued through to May with a 6.0 per cent increase expected.

Also on Thursday, the Reserve Bank of Australia (RBA) issues the “Financial Aggregates” publication, including private sector credit figures. Credit may have risen by 0.5 per cent in May.

And to begin July, on Friday CoreLogic issues its home value index for June. National home prices could fall by around 0.7 per cent, led lower by falling prices in both Sydney and Melbourne. But property prices are still increasing in Adelaide and Brisbane.

Also on Friday, S&P Global and the Australian Industry Group (AiGroup) release separate survey results detailing activity in the Aussie manufacturing sector. Overseas: China business surveys and US inflation data dominates

In the coming week, investors will focus their attention on Chinese purchasing manager surveys and the release of the US Federal Reserve’s preferred inflation measure, the core personal consumption expenditures price index.

But the week kicks-off on Monday in China with the release of industrial profits figures for May.

In the US on Monday, data on pending home sales is released with the durable goods orders report and the
Dallas Federal Reserve manufacturing index. Pending home sales are expected to fall by 4.5 per cent in May, potentially the seventh straight monthly decline, as a steep climb in mortgage rates compounds affordability challenges. But new orders for long-life or durable goods may have edged higher by 0.1 per cent in May.

On Tuesday, the weekly Johnson Redbook chain store sales report is issued with the advance goods trade
balance, wholesale and retail inventories, Conference Board consumer confidence index and the Richmond
Federal Reserve manufacturing index. The goods trade deficit is tipped by economists to narrow from US$106.7 billion to US$102 billion in May. And the consumer sentiment gauge could dip from 106.4 to 100 points in June.

Also on Tuesday, two key measures of home prices are scheduled for April. The Federal Housing Finance
Agency (FHFA) house price index and the S&P/CoreLogic Case-Shiller home price gauge are both released.
According to S&P Case-Shiller, its 20-city home price index grew by a record 21.2 per cent over the year to March. But a deceleration in home prices is expected this year as home borrowing costs increase.

On Wednesday, US economic growth data is issued with the weekly data on mortgage applications from the
Mortgage Bankers Association. In the third estimate for the March quarter, GDP likely fell at a 1.4 per cent annualised rate due to a jump in imports, drop in exports and a slower build-up of business stockpiles.

On Thursday in China, purchasing manager’s indexes (PMIs) are released by the National Bureau of Statistics. The end of the Shanghai Covid lockdown and a relaxing of virus curbs in Beijing are likely to see a pickup in economic activity in May. Economists expect both the manufacturing and services PMIs to expand modestly.

On Thursday in the US, the usual US weekly data on claims for unemployment insurance (initial jobless claims) will be issued with the Chicago PMI for June. The latter may have eased from 60.3 to 59.1.

Also on Thursday, the all-important personal spending and income data is issued. Economists expect spending and income to both increase by 0.5 per cent in May. But all eyes will be on the US Federal Reserve’s favourite inflation gauge – the core personal consumption expenditures (PCE) price index or deflator. The measure, which strips out food and energy prices, was above the US central bank’s
target range of 2 per cent for a 13th consecutive month at 4.9 per cent over the year to April. The PCE core deflator may have lifted by 0.5 per cent in May.

On Friday in China, Caixin releases the private sector manufacturing gauge for June.

And on Friday in the US, construction spending data is releasedalongside manufacturing PMIs from both S&P Global and the Institute of Supply Management (ISM).

Originally published by Ryan Felsman, Senior Economist, @CommSec