The week kicks off on Monday when ANZ reports its job advertisements data for August, the AiGroup releases its services gauge and the Reserve Bank issues data on credit and debit card lending. The number of job ads has lifted off pandemic lows with the resources-focused economies re-opening and benefiting from Chinese demand. But the imposition of level four restrictions in Victoria will weigh on the headline result.
On Tuesday, the Commonwealth Bank (CBA) releases its weekly data on credit and debit card spending and ANZ-Roy Morgan issues weekly consumer sentiment data. The Australian Bureau of Statistics (ABS) also provides weekly payroll jobs & wages data, which could point to an employment drop in August.
Also, on Tuesday, the NAB business survey is released for August. Conditions saw a further improvement in July with the services sector boosted by the easing of virus restrictions. But conditions in the transport, utilities and construction industries weakened. Confidence deteriorated across all industries, states and territories, except South Australia and Western Australia. The most significant softening in confidence occurred in NSW and Victoria on escalating virus concerns prior to the imposition of level four restrictions in Melbourne and regional Victoria.
On Wednesday, Westpac and Melbourne Institute’s September consumer confidence survey is released. If the more timely weekly ANZ-Roy Morgan sentiment rating is any guide, confidence may have lifted with new COVID-19 cases easing in Victoria. The extension of the government’s Job Keeper scheme, superannuation withdrawals and mortgage deferrals have boosted household incomes with consumer views on their finances improving.
Also, on Wednesday, the ABS issues both the June quarter Labour accounts data the Lending indicators report for July. Most focus will be on the recovery in home loan approvals data with transaction volumes lifting in May and June. The value of loan refinancing approved for owner-occupiers was the second highest on record in June as households continued to reduce their mortgage repayments. But new home lending is likely to have declined in Victoria as housing market activity went back online. The value of home loans may have lifted 2 per cent in July.
On Friday, the ABS releases tourism data for July. In the provisional reading, arrivals fell 99.1 per cent compared with a year ago and departures were down 96.8 per cent for the period with international borders still shut.
Overseas: Focus on inflation data after US Labor Day holiday
US financial markets are closed on Monday as Americans observe the Labor Day public holiday.
The week kicks off on Monday in China with the release of international trade data for August. Exports to the US will continue to be a key focus given China’s commitment to the ‘Phase One’ trade deal. In July, exports to the US rose 12.5% from a year ago – the fastest rate since 2018 – even though trade tensions escalated.
On Tuesday in the US, the National Federation of Independent Business (NFIB) small business optimism and IBD/TIPP economic optimism indexes are issued with consumer credit data. US small business sentiment eased in July as rising new virus cases and state reclosures dampened hopes for a swift economic recovery.
On Wednesday in China, consumer and producer prices data are scheduled for August. In July, food prices accelerated, and factory price deflation eased amid transport disruptions from flooding in central and southern China. But consumer prices are tipped to ease from 2.7% in July to 2.3% in August from a year ago.
On Wednesday in the US, the weekly Johnson Redbook chain store sales and Mortgage Bankers Association (MBA) mortgage applications reports are both scheduled.
The Job Openings and Labor Turnover Survey (JOLTS), however, will be of most interest to investors on Wednesday after the number of available positions unexpectedly increased from 5.37 million in May to 5.89 million in June. Economists expect hiring to lift to around 6 million job openings in July.
On Thursday, the release of weekly claims for unemployment benefits (initial jobless claims) will be keenly anticipated by investors with labour market slack remaining elevated in the US. And an update on wholesale inventories for July will also feature. Inventories were down just 0.1% in the preliminary release.
Also, on Thursday, producer prices indexes are issued for August. Core producer prices rose 0.5% in July from a year ago – the largest gain since 2018. That said, a more modest 0.2% increase is tipped in August.
On Friday, the monthly budget statement for August is scheduled. But economists will have a laser-like focus on consumer price indexes (CPI) after the US Federal Reserve’s shift to inflation-average targeting. The headline CPI lifted by 0.6% in July following a 0.6% gain in June after the pandemic lockdown suppressed demand.
The core CPI – which excludes volatile food and fuel costs – also increased 0.6% in July due to rising auto and apparel costs. It was the biggest monthly gain in almost three decades, pushing the annual growth rate up to 4-month highs of 1.6% from 1.2% in June.
Fixed income measures of inflation expectations lifted after the release of the report. But a smaller 0.2% increase in core CPI is expected in August.
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