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Australia: Summer sizzler

Craig James
27 November 2020

The highlight of next week is the National Accounts on Wednesday. The economy may have expanded by 2% in the September quarter.

On Monday

The week kicks off on Monday with the Business Indicators publication from the Australian Bureau of Statistics (ABS). The quarterly data includes readings on profits, sales, inventories and wages. Also, on Monday the ABS releases estimates of industry multifactor productivity for 2019/20. The Reserve Bank issues private sector credit data. The Melbourne Institute provides its monthly inflation update.

On Tuesday

On Tuesday, weekly indicators are issued, including Commonwealth Bank (CBA) data on card spending, the ANZ-Roy Morgan consumer sentiment index and ABS payrolls data.

Also, on Tuesday: The Reserve Bank Board meeting; CoreLogic home prices; Balance of Payments; AiGroup manufacturing survey; building approvals and government financial statistics. The Reserve Bank Board meeting is usually the highlight, but a plethora of monetary policy easing measures were announced in November. No changes in policy settings are expected.

On Wednesday

On Wednesday, the ABS issues the National Accounts for the September quarter. Commonwealth Bank Group economists expect a 2% rebound in GDP growth in the quarter. The economic recovery follows a sharp 7% contraction in GDP in the June quarter due to the government’s nationwide COVID-19 lockdown.

Also, on Wednesday, Reserve Bank Governor Philip Lowe appears before the House of Representatives Standing Committee on Economics at 11am AEDT.

On Thursday

On Thursday, the ABS issues the October international trade and lending data. New vehicle sales data and AiGroup construction gauge are scheduled. And ‘final’ IHS-Markit purchasing managers’ indexes are released.

On Friday

And on Friday the ABS releases the final, detailed retail trade estimates for October. Preliminary data showed retail spending unexpectedly lifted 1.6% in the month due to Victoria’s economic reopening.

Overseas: Focus on US jobs data and China purchasing managers surveys

Purchasing manager indexes in China will be in focus in the coming week as investors gauge the strength of its economic recovery. As always, Friday’s monthly US jobs data is the highlight.

On Monday

The week kicks-off on Monday in China with the ‘official’ purchasing managers surveys for manufacturing and services sectors from the National Bureau of Statistics. The rebound in domestic demand is supportive of activity.

On Monday in the US, the Dallas Federal Reserve manufacturing and Chicago purchasing managers indexes for November are both issued. Data on pending home sales for October will also be a key focus for investors.

On Tuesday

And on Tuesday in China the November Caixin manufacturing purchasing manager survey is scheduled. The new export orders component may signal whether demand from virus-hit advanced economies has weakened.

On Tuesday in the US, there are two purchasing manager surveys released for the manufacturing sector – from the Institute of Supply Management (ISM) and from IHS-Markit the ‘final’ reading). Also, on Tuesday in the US, data on construction spending is issued with vehicle sales and the weekly Johnson Redbook chain store sales report. Construction spending is tipped to lift by 0.8% in October.

On Wednesday

On Wednesday in the US, a hodgepodge of data is issued: ADP private sector payrolls; ISM New York index; the US Federal Reserve Beige Book; and the usual weekly data on US mortgage applications from the Mortgage Bankers Association (MBA). Most interest will be in the Federal Reserve Beige Book to get a sense of whether the US economic recovery is stalling amid renewed virus government restrictions and fading fiscal stimulus.

On Thursday

On Thursday in China, the November private sector Caixin purchasing managers survey for the services sector is issued. Activity in the services sector has rebounded with the consumer-led economic recovery gaining traction.

On Thursday in the US, there is another eclectic array of economic data: purchasing manager services indexes from both the ISM and IHS-Markit; Challenger job cuts; and the usual weekly data on jobless claims (unemployment benefits).

On Friday

On Friday in the US, November jobs data is released with October international trade and factory orders data.

The employment (non-farm payrolls) report usually dominates attention. But the unemployment rate, hours worked, and average hourly earnings data also vie for attention. The labour market has lost some momentum with 500,000 jobs expected to have be added or reinstated in November. The unemployment rate may ease from 6.9% to 6.8%.

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