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Investor Signposts: Week Beginning Aug 6 2018

Investor Signposts: Week Beginning Aug 6 2018

By Expert Panel 06.08.2018


Investor Signposts 3 Aug 18: The Reserve Bank dominates the agenda

CommSec Chief Economist Craig James previews the economic data scheduled for the week ahead including the RBA Board Meeting, Statement on Monetary Policy and Chinese International Trade figures. 




Australia: The Reserve Bank dominates the agenda

• The Reserve Bank dominates the local agenda in the coming week. In overseas markets, inflation data is in focus in both the US and China.

• The week kicks off on Monday with the release of the ANZ measure of job advertisements. Job ads have been choppy in recent months. In June, ads fell 1.7 per cent from 7-year highs after rising by 1.4 per cent in May. Job ads are still up 6.9 per cent on a year ago. The number of jobs advertised (seasonally adjusted) was 175,660 in June while the trend level of job ads stood at a 7-year high of 177,692.

• On Tuesday, the Reserve Bank Board meets to decide interest rate settings. The last move in rates was two years ago in August 2016. And given the recent tame inflation data, the period of inaction on rates should continue.

• The Performance of Construction index is also released on Tuesday.

• On Wednesday, the Australian Bureau of Statistics (ABS) will release the June data on housing finance.

• In May the number of loans (commitments) by home owners (owner-occupiers) rose by 1.1 per cent – the first increase in six months. And the value of new housing commitments (owner occupier and investment) rose by 0.5 per cent. Owner-occupier loans rose by 0.7 per cent and investment loans fell by 0.1 per cent.

• Based on data from the Bankers Association, the value of home loans may have fallen by 1 per cent in June, signalling a flattening of home loan demand.

• Also on Wednesday the Reserve Bank Governor, Philip Lowe, delivers a speech to the Anika Foundation lunch in Sydney. The title of the speech is “Demographic Change and Recent Monetary Policy”. The Reserve Bank Governor will no doubt provide some top-level views given the recent tame inflation data and then these will be fleshed out on Friday with the monetary policy statement.

• That quarterly Statement on Monetary Policy will be released at 11.30am Sydney time on Friday. The main focus will be the forecasts on inflation and economic growth (GDP) but no major changes are expected.

• Also on Friday, the ABS will release the June lending finance figures. This data covers not just new home loan commitments but commercial, personal and lease loans.

• In May, total new lending commitments (housing, personal, commercial and lease finance) fell by 1.4 per cent to $67.4 billion. Commitments are down by 1.5 per cent on the year. In trend terms, lending fell for the fifth straight month, down by 1.3 per cent in May.

Overseas: Inflation in the spotlight

• Inflation figures will be released in the US and China over the week. The sensitive Chinese international trade data (exports and imports) is also issued.

• The week kicks off on Tuesday in the US when the JOLTS data is released – the Job Openings and Labour Turnover Survey. This survey is conducted by the Bureau of Labour Statistics and attempts to measure the level of labour demand or job vacancies. Vacancies eased by 202,000 in May but this was from record levels – the 6.64 million jobs waiting to be filled remains significant.

• Also on Tuesday consumer credit data is released in the US. And the regular weekly data on chain store sales is issued.

• On Wednesday in China, international data is issued. In June, exports were up by 11.3 per cent on a year ago with imports up 14.1 per cent. The trade surplus stood at US$41.6 billion. In July, economists expect that imports rose at a 20.8 per cent annual rate with exports up 10 per cent. Greater imports from the US combined with a smaller trade surplus would be viewed positively by White House officials.

• On Wednesday in the US, the regular weekly data on new mortgage applications is issued.

• On Thursday in China data on consumer and producer prices is expected. Consumer prices are currently up 1.9 per cent on a year earlier with producer prices up 4.7 per cent – the latter boosted by higher commodity prices, especially petroleum products.

• The US data on producer prices will be released on Thursday with data on wholesale inventories. The data on consumer prices is issued on Friday.

• Also on Friday in the US is the monthly data on the federal budget (for the month of July). In China the July data on vehicle sales will be released.

Financial markets

• The Australian earnings season gets underway in earnest in the coming week.

• Amongst companies expected to report earnings on Tuesday are: Reckon, Capilano Honey, IOOF Holdings Limited, Navitas Ltd, Shopping Centres Property Group, Transurban Group.

• On Wednesday: Skycity Entertainment Group, AMP, CBA, Tabcorp Holdings.

• On Thursday: AGL Energy, Crown Resorts, Magellan Financial Group, Mirvac, Suncorp.

• On Friday: Aventus Retail Property Fund, Baby Bunting Group, Charter Hall Long Wale REIT.


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WHAT’S ON THIS WEEK

week 24 August 2018
    • 20
    • CoreLogic Capital city house prices for the week just ended | 9:00 AM
    • 21
    • RBA August board meeting minutes | 10:30 AM
    • 22
    • ABS June quarter construction data | 9:11 AM
    • 23
    • ABS Job market estimates for July | 9:00 AM
    • 24
    • N/A No items listed | 9:00 AM

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