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Investor Signposts: Week Beginning April 16 2018

Investor Signposts: Week Beginning April 16 2018

By Expert Panel 16.04.2018


Investor Signposts: Reserve Bank & jobs data in focus

CommSec Senior Economist Ryan Felsman takes a look at the economic data scheduled for the week ahead including the Reserve Bank Board Minutes, Employment data and China economic growth data.

 

Australia: Reserve Bank and jobs in focus

• A quiet week is in prospect on the data front in Australia. The Reserve Bank releases the minutes of its April Board meeting. But the main focus will be on whether the Aussie labour market can continue its record-breaking run of monthly job gains.

• On Monday the Bureau of Statistics (ABS) releases lending finance data. The total value of new lending commitments (housing, personal, commercial and lease finance) rose by 0.5 per cent in January to $71.5 billion, up from US$71.1 billion in December. Commitments are up by 6.1 per cent on a year ago.

• On Tuesday the weekly gauge of consumer confidence is issued by ANZ and Roy Morgan.

• Also on Tuesday the Reserve Bank releases minutes of its April Board meeting. Commentary on wages growth, share market volatility, trade protection and household consumption could be of particular interest to market participants. We don’t expect any significant change in the Bank’s view on the inflation and economic growth outlook for Australia. Interest rates are firmly on hold.

•  On Wednesday, the ABS releases the “Overseas Arrivals and Departures” publication. The publication includes data on tourist flows as well longer-term migration data. Tourist arrivals rose by 2.4 per cent to a record-high 760,200 during the month of January. Arrivals increased by 5.7 per cent over the year. Departures increased by 2.2 per cent to a monthly record-high 894,100 in January. Departures were up by 2.6 per cent on a year ago.

•  Also on Wednesday the Department of Jobs and Small Business releases its internet vacancy index. The index has now risen for 16 consecutive months – the longest period of growth since March 2011. The index has increased by 10.5 per cent over the year to 5½-year highs in February.

•  On Thursday the ABS issues the March employment report. Jobs rose for a record-breaking 17th straight month in February. The unemployment rate edged-up to 5.6 per cent due to an increase in the participation rate to a near 7-year high of 65.7 per cent. The strengthening job market has encouraged people back into the workforce, to look for a job or to work more hours. The underemployment rate is 8.4 per cent, implying that there is still some slack in the labour market. Economists tip an increase in total jobs of around 25,000 during the month.

•  On Friday the CommBank Business Sales Indicator (BSI), a measure of economy-wide spending, is released for March. The BSI rose by 1.0 per cent in trend terms in February - the strongest pace of growth in four years.

Overseas: Chinese economic health check

• In China, indicators such as economic growth, retail sales, investment, production and house prices are all issued.  Output is expected to remain solid, despite seasonal volatility caused by the Lunar New Year holiday period. 

• The week kicks off on Monday in the US with data on retail sales, the National Association of Home Builders (NAHB) index and the New York State Empire manufacturing survey. 

• Attention will turn to China on Tuesday. The all-important March quarter economic growth (GDP) will capture the most headlines. The Chinese leadership continues to target ‘sustainable’ and ‘quality’ growth outcomes as it tilts output towards the consumer. Economists forecast an annual growth rate of 6.8 per cent with activity supported by the industrial sector. The technology and financial sectors may have contributed less this quarter. Retail sales annual growth of near 10 per cent is tipped.

• On Tuesday US housing data is released. Starts and permits were weaker-than-expected in February, yet the underlying increase in single-family starts and the uptick in the number of units under construction provided optimism.

• Also on Tuesday economists expect that production rose a further 0.4 per cent in March. Capacity utilisation is at the highest level in three years, implying potential increases in input costs. All at a time when higher tariffs are proposed, potentially boosting inflation.

• On Wednesday, the US Federal Reserve re-takes centre stage. The most recent Beige Book – a national survey – cited that “most [US} districts saw employers raise wages and expand benefit packages in response to tight labour market conditions”. Federal Reserve Vice Chair for Supervision, Randal Quarles, testifies before the US Senate Banking Committee.

• Also on Wednesday the National Bureau of Statistics issues China’s 70-city housing price data for March. House price growth decelerated to 5.2 per cent in February, continuing the decline from a peak of 12.6 per cent in November 2016. Policymakers have announced stricter property-buying controls in an effort to cool prices. In tier-1 cities, housing prices fell on an annual basis in January for the first time since May 2015.

• On Thursday the influential Philadelphia Federal Reserve manufacturing gauge is released for March. In February, 64 per cent of firms reported labour shortages, while 70 per cent of firms highlighted skills mismatches between business requirements and available labour.

• Also on Thursday the Conference Board's Leading Economic index is issued for March. The index increased by 0.6 per cent in February. The index is tipped to rise by 0.4 per cent in March.

>> BACK TO THE NEWSLETTER: Click here to read other articles from this week's newsletter



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