On Monday the Federal Government hands down its Mid-Year budget update. Increased government spending on aged care, drought and infrastructure is expected. But necessary investment allowances to incentivise business investment and a potential bring forward of income tax cuts appear unlikely before the May budget. Also, on Monday, CBA/IHS Markit release ‘flash’ purchasing manager indexes for December. Both manufacturing and services activity contracted in November. And Jonathan Kearns, Reserve Bank of Australia Head of Financial Stability, gives a speech at the UNSW Australasian Finance & Banking Conference in Sydney.
On Tuesday, ANZ and Roy Morgan release the weekly consumer confidence data. And the Commonwealth Bank releases its Household Spending Intentions survey for November. The Reserve Bank also issues the minutes of its December 3 policy meeting. While the official cash rate was left unchanged, a soft run of economic releases - underlined by weak consumer spending and declining business investment - suggest that further rate cuts may be required to support progress towards full employment and inflation back towards the 2-3% target.
Also, on Tuesday, lending data is due from the Bureau of Statistics (ABS). The recovery in the housing market since May has boosted demand for home loans. In fact, approvals for new owner-occupier loans rose for a fifth successive month in September as home prices grew sharply in Sydney and Melbourne. The value of owner-occupier home loans is up by 17.3% from the May lows. But a softening in demand from first home buyers for home loans has re-intensified concerns about housing affordability and elevated mortgage debt.
On Wednesday, the Department of Employment releases its skilled internet job vacancies data. In trend terms, the Internet Vacancy Index decreased by 0.9% in October – the 10th successive monthly fall. The index is 8.5% lower than a year ago – the biggest annual decline in almost 6 years.
On Thursday the ABS releases the June quarter population estimates together with the November labour market data. Annual population growth probably held near 1.5% – still one of the fastest rates across advanced nations. Meanwhile around 15,000 jobs are tipped by Commonwealth Bank economists to have been added in November, leaving the jobless rate near 5.3%. Also, on Thursday, the ABS issues its “Finance and Wealth” report as part of the September quarter national accounts. A recovery in property prices and the continued lift in listed assets – shares and fixed income – likely boosted net wealth for Aussie households to fresh record highs.
Overseas: China activity data and US economic growth data in focus
In China, the highlights are: House prices (December 16); investment/production/retail spending/unemployment data for November (December 16); Industrial profits (December 27); the ‘official’ manufacturing and services purchasing managers indexes (December 31); Caixin manufacturing (January 2).
In the US on Monday (December 16) the influential Empire State manufacturing index is released with the NAHB housing market index and ‘flash’ IHS/Markit purchasing manager indexes for December.
On Tuesday the housing starts and building permits data are issued with weekly chain store sales. And industrial production and JOLTS job openings figures are also due.
On Wednesday, weekly MBA mortgage applications data is released.
On Thursday, the Philadelphia Federal Reserve manufacturing index is released with the weekly data on unemployment insurance claims, the current account balance, Conference Board Leading index and existing home sales.
And then there is ‘Super Friday’. It appears that all data issuers want to clear the decks before Christmas and the end of the year. Included on Friday December 20: Economic growth (GDP); personal income & spending; consumer sentiment; and the Kansas City Federal Reserve manufacturing index. Looking further out, key economic releases to round-out 2019 include: Chicago Federal Reserve national activity index and new home sales (Monday December 23); durable goods orders and the influential Richmond Fed manufacturing index (Tuesday December 24); weekly data on unemployment insurance claims (Thursday December 26); goods trade balance; pending home sales; inventories; Dallas Fed manufacturing activity index; Chicago purchasing manager’s index (Monday December 30); weekly MBA mortgage applications S&P/Case-Shiller home price index; FHFA house price index; and Conference Board consumer confidence index (Tuesday December 31).
And on Friday January 3, the Federal Reserve (FOMC) December 11 meeting minutes are issued with the ISM manufacturing index, construction spending data and new vehicle sales figures.
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