In the coming week there will be more insights into the post federal election economic environment in terms of business conditions and consumer sentiment. But the Reserve Bank’s laser-like focus on developments in the labour market gives the jobs and wages data top billing for investors.
The week kicks off on Monday when the Reserve Bank releases June data on credit and debit card lending.
On Tuesday the weekly series of consumer confidence will be released by Roy Morgan and ANZ. The weaker value of the Aussie dollar and recent share market volatility are front-of-mind for Aussie consumers. Also, on Tuesday the NAB business survey is issued for July. Business confidence lifted following the federal election and the interest rate cut in June. But conditions have deteriorated, sitting below the long-run average for the first time in five years.
On Wednesday, monthly consumer confidence data is released by the Melbourne Institute and Westpac. Confidence fell to a 2year low July, but the receipt of tax refunds and improving property market conditions could boost sentiment. Also, on Wednesday the Bureau of Statistics (ABS) releases the quarterly Wage Price Index for the June quarter. Commonwealth Bank Group economists forecast wages growth of 0.5 per cent in the quarter and an annual growth rate of 2.2%. Subdued wages growth has been associated with low inflation outcomes, while restraining consumer spending.
On Thursday, the all-important jobs report for July is issued. The unemployment rate is expected to remain steady at 5.2% for a fourth consecutive month with 20,000 jobs added. Also, on Thursday, the bi-annual average weekly earnings figures are released by the ABS, providing dollar estimates of wages in the economy across states and industries. June tourism data is released. And Reserve Bank Deputy Governor Guy Debelle delivers a speech: “Risks to the Outlook”.
Overseas: China activity data in the spotlight
The summer lull in US ‘Fedspeak’ and the re-intensification of the US-China trade war elevates Chinese July activity data to the top of the data dais in the coming week. US retail spending and inflation will be in focus too.
The week begins on Monday when the US July budget statement is issued. A deficit of US$116 billion is forecast.
On Tuesday, the regular weekly reading on US chain store sales is due together with data on small business sentiment and consumer prices. Shelter, furnishings, used vehicles and clothing costs all lifted in June.
On Wednesday, falling US import and export prices are expected to reaffirm that inflation remains tame. Weekly mortgage applications figures from the US Mortgage Bankers Association are also due. On Wednesday in China, the July activity data is due. Following the upside surprise in June, a ‘give-back’ is widely anticipated as policy support fades. Local government bond issuance - a key support for infrastructure spending - has been dialled back. And retail spending may ease after strong online sales during the mid-year shopping festival. New emission standards are also expected to weigh on car sales.
New home price data follows on Thursday in China. Annual home price growth decelerated from 11.3% in May to 10.8% in June. New home prices rose in 63 cities in June. On Thursday in the US, the weekly figures on jobless claims are issued, along with retail sales, factory, industrial production, homebuilder sentiment, unit labour costs, productivity and business inventories data. Solid consumer demand and confidence is driving retail spending, keeping the US expansion intact. But factory sector health is fragile with industrial production subdued and regional manufacturing readings buffeted by trade tensions.
On Friday, US housing starts, building permits and consumer confidence data complete the week. US consumer sentiment is near cyclical highs, supported by low unemployment and solid wages growth. The imposition of tariffs on Chinese-made consumer goods effective September 1, could eventually hit US consumers in the back pocket.
Around 80 Aussie companies are scheduled to announce earnings results in the coming week as the reporting season cranks up a gear. Companies reporting on Monday include Ansell, Argo Investments, Aurizon, Bendigo & Adelaide Bank, GPT Group and JB Hi-Fi.
On Tuesday: Arena REIT, Challenger and Magellan.
On Wednesday: Aveo, Computershare, CSL, Dexus, Tabcorp and Vicinity Centres.
On Thursday: ASX, Ausdrill, Blackmores, Breville, Evolution Mining, Iluka Resources, QBE Insurance, SEEK, Super Retail Group, Sydney Airport, Telstra, Treasury Wine Estates and Whitehaven Coal and Woodside Petroleum.
On Friday: Cochlear, Domain, Kogan.com, Newcrest Mining, Nick Scali, Spotless Group and Star Entertainment.
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