25 October 2020
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Australia: Mixed statistical offerings

Craig James
18 September 2020

On Tuesday

The week kicks off on Tuesday when Reserve Bank Deputy Governor Guy Debelle gives a speech –“The Australian Economy and Monetary Policy” – at the Australian Industry Group conference at 10.30am AEST. Also, on Tuesday, weekly data on credit and debit card spending from the Commonwealth Bank (CBA), consumer sentiment from ANZ-Roy Morgan and the Bureau of Statistics’ (ABS) payroll jobs and wages figures are all released. The payrolls data will be closely monitored for continuing divergences across regional labour markets with the regional (Statistical Area 4 or SA4) estimates issued through to the week ending September 5.

On Wednesday

On Wednesday the week’s stand-out data is released – the preliminary retail trade figures for August. Melbourne entered stage 4 lockdown restrictions in August with Victorian retail spending impacted by social distancing measures and temporary retail store closures. CBA Group economists estimate that spending may have declined by 4% in the month. Despite this, retail sales growth has been boosted by government payments and superannuation withdrawals. And household savings and potential tax cuts – along with closed international borders – could see pent up demand from consumers even as stimulus is tapered into year end.

Also, on Wednesday, skilled internet job vacancies data is issued for August. And the preliminary Markit purchasing managers’ indexes are released for September with a focus on the contraction in services sector activity due to government restrictions.

On Thursday

On Thursday, the ABS issues three publications: the June quarter “Finance and Wealth” report; population statistics for March; and detailed Labour Force figures for August. Household wealth may have lifted in the June quarter due to the rebound in global share markets. But gains will be capped by falling home prices. Population growth probably eased again in March, but the impact of COVID-19 border closures on inbound migration won’t become apparent until later in the year. And the detailed labour data will show the changes in industry employment from May to August.

On Friday

On Friday, August preliminary international trade data will be scoured for signs of a weakening in Chinese demand for Aussie agricultural and resource products. In response to political tensions, the imposition of tariffs, anti-dumping measures and other import restrictions by the Chinese have weighed on Aussie wine, beef, barley and coal exports.

Overseas: Reserve Bank of New Zealand meeting. US factory and housing data in focus.

It is a quieter week on the US and China data docket. Most investor interest could be on the Reserve Bank of New Zealand’s interest rate decision with policymakers seemingly intent on taking Kiwi interest rates into negative territory.

On Monday

The week kicks off on Monday in China when the 1-year and 5-year loan prime rate decision is announced. In the US on Monday the Chicago Federal Reserve National Activity index for August is issued.

On Tuesday

On Tuesday, the weekly Johnson Redbook chain store sales figures are released with existing home sales and the influential Richmond Federal Reserve manufacturing index for September. Sales of previously-owned homes surged by a record 24.7% in July to a 5.86 million annual rate. Low mortgage rates and solid housing demand could see sales lift by a further 1.5% in August to a 5.95 million annual rate.

On Wednesday

On Wednesday, the Reserve Bank New Zealand (RBNZ) makes a decision on the official cash rate (OCR). While no change in the cash rate is expected at this meeting, we expect the RBNZ to continue to use forward guidance and its expanded NZ$100 billion Large Scale Asset Purchase program to push government bond yields lower.

Of course, most attention will be on Governor Adrian Orr’s commentary around negative interest rates as policymakers continue to examine additional unconventional monetary policy measures to stimulate the weak New Zealand economy. CBA Group economists expect the RBNZ to cut the OCR to -0.50% in early 2021.

On Wednesday in the US, the regular weekly data on US mortgage applications from the Mortgage Bankers Association (MBA) is released with the July house price index from the Federal Housing Finance Agency (FHFA). Also, on Wednesday, the Markit ‘flash’ (preliminary) results from the survey of purchasing managers will reviewed for any evidence of a loss of momentum in services and manufacturing sector activity in September.

On Thursday

On Thursday, weekly claims for unemployment benefits (initial jobless claims) data is issued with August new home sales figures and the September Kansas City Fed manufacturing activity gauge. Also, on Thursday, US Federal Reserve Chair Jerome Powell is scheduled to testify before the US Senate Banking Committee.

On Friday On Friday, the latest durable goods orders report – a proxy for business investment – for August is issued. Bookings for orders rose 11.2% in July amid a surge in automobile demand.

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