The week kicks off on Monday when the Bureau of Statistics (ABS) issues the Business Indicators publication that includes data on profits, sales, wages and stocks. Also, on Monday are surveys of manufacturing from AiGroup and CBA. CoreLogic issues the May data on home prices. ANZ job ads and the Melbourne Institute inflation gauge are issued. In May, home prices may have fallen by around 0.5%. But the data pre-dates the Federal Election result, APRA announcement of mortgage serviceability and the Reserve Bank Governor’s guidance on rate cuts.
On Tuesday the Reserve Bank meets and economists are in agreement that a quarter of a per cent rate cut will be delivered – the first move in almost three years. The Reserve Bank Governor speaks at the RBA Board dinner held with the business community. In terms of data, the quarterly balance of payments figures is issued with government finance, retail trade and the weekly reading of consumer sentiment. Retail spending has risen for the last three months, averaging 0.4% gains a month. But some of this growth in spending can be attributed to higher grocery prices.
On Wednesday the focus will be on the March quarter economic growth (GDP) estimates. The data is now almost ancient history. Not only are readings on the economy available for April and May, the federal election is also in the rear window. Activity has seemingly lifted markedly post-election. Overall, we expect that the economy grew by around 0.5% in the quarter with annual growth near 2.3%. Also, on Wednesday, both AiGroup and the CBA release the May surveys on services activity. And the Federal Chamber of Automotive Industries issues the May data on new vehicle sales.
On Thursday the April figures on exports and imports (international trade) are released. There have been 15 consecutive monthly trade surpluses and the annual surplus to March was at a record high of $34.1 billion.
And on Friday, the comprehensive April data is released on new lending by financial intermediaries to the household and business sectors with the Performance of Construction index. Encouragingly, Bankers Association data suggests that the number of housing loans lifted 1.7% in the month with the value of commitments up 6.5%.
Overseas: US jobs data & the Beige Book awaited
A busy week is in prospect. In the US the Beige Book is issued on Wednesday and non-farm payrolls (jobs) on Friday.
The week begins on Monday with readings on the manufacturing sector in the US and China. In the US there are rival surveys from Markit and the Institute of Supply Management. In China, there is the survey from the private sector Caixin group. Manufacturing activity has softened across the globe. Also, on Monday in the US is data on new vehicle sales and construction spending.
On Tuesday in the US, data on factory orders and the ISM New York index are released with weekly chain store sales. The Federal Reserve chair, Jerome Powell, gives opening remarks at a conference.
On Wednesday, the focus shifts to surveys on the services sector. Again, in the US there are the Markit and ISM services surveys. In China, the services survey is conducted by Caixin. On Wednesday, the focus shifts to surveys on the services sector. Again, in the US there are the Markit and ISM services surveys. In China, the services survey is conducted by Caixin
On Thursday in the US is the April international trade data (exports and imports). The deficit is seemingly stuck near US$50 billion. Also, on Thursday are final estimates of unit labour costs and productivity for the March quarter, the Challenger survey of job cuts and the weekly data on initial claims for unemployment insurance.
On Friday in the US, the all-important non-farm payrolls (jobs) data is released. The job market is strong. Unemployment stands at a 49-year low of 3.6%. Jobs lifted by 263,000 in April. And hourly earnings are up 3.2% over the year. Economists tip a 195,000 lift in payrolls with little change tipped for hourly earnings and the jobless rate.
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