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March, 201911:04 AM



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Investor Signposts: Week Beginning Jan 07 2019

Investor Signposts: Week Beginning Jan 07 2019

By Expert Panel 07.01.2019


Retail sales & Chinese economic growth the highlights 

CommSec Senior Economist Ryan Felsman previews the economic data scheduled for the week ahead including international trade, retail sales, building approvals and Chinese GDP. 




Australia: Back to work

• The second week of January sees the resumption of the release of several ‘top shelf’ indicators. Retail trade, building approvals and quarterly job vacancies headline this week’s data docket in Australia.

• The week kicks off on Monday when the AiGroup releases its manufacturing index. Activity has expanded for 26 consecutive months, led by the non-metallic minerals and large food and beverages sectors in November. Conditions are particularly strong in Victoria. 

• On Tuesday, the Bureau of Statistics (ABS) releases the international trade data (data on exports and imports) for November. Australia’s rolling annual surplus rose from $13.69 billion to $15.29 billion in October – the highest level in 11 months.

• Also on Tuesday, ANZ releases job advertisements data for December. Ads fell 0.3 per cent in November, but are up by 2.3 per cent over the year – the slowest annual growth rate since May 2015. And on the same day ANZ and Roy Morgan release the weekly consumer confidence data.

• The ABS’ quarterly job vacancies report for November is released on Wednesday. Vacancies rose by 0.6 per cent to a record 238,200 in the three months to August. Job vacancies are up by 16.5 per cent on a year ago – easing from the strongest annual growth rate in 7½ years.

• Also on Wednesday, building approvals data is released by the ABS and AiGroup releases its services gauge. Residential building approvals fell by 1.5 per cent in October and sit 13.4 per cent lower on a year ago. But private house approvals rose by 2.7 per cent. Home building is the best in around a decade in Hobart.

• On Friday, retail trade data is issued by the ABS. Retail spending rose by 0.3 per cent in October to be up 3.6 per cent over the year. Annual trend growth of spending in Victoria lifted to four-year highs of 6.1 per cent. And Tasmanian retail sales rose by 5.8 per cent over the year to October, up from 5.6 per cent in September.

• The AiGroup also issues its construction index also on Friday.

Overseas: Chinese economic growth and US inflation data in focus

• There are several data standouts in the US and Chinese economic calendar over the coming week. US inflation and trade data are released. Chinese economic growth, trade and inflation figures are also of major interest.

• In the US on Monday the influential ISM non-manufacturing index is released together with factory orders. ISM’s services sector index rose by 0.4 points to 60.7 points in November – the second highest reading in 2018. Factory orders decreased by 2.1 per cent in October, and growth in core capital goods orders and shipments in September was revised down modestly. Business investment in the US is lacklustre despite tax cuts.

• On Tuesday in China, international trade data is scheduled. November exports rose by just 5.4 per cent from a year earlier, while annual import growth was 3 per cent, the slowest since October 2016. The “front-loading” impact as Chinese firms rushed out shipments to beat planned US tariff hikes appears to have faded.

• In the US, international trade data is also issued on Tuesday, together with the NFIB business optimism index, consumer credit and weekly chain store sales. The US trade deficit continues to deteriorate, despite the implementation of tariffs. The goods and services deficit has increased by US$51.3 billion or 11.4 per cent over the year to October.

• Also on Tuesday, the Job Openings and Labor Turnover Survey (JOLTs) and weekly MBA mortgage data are issued. The number of positions waiting to be filled rose by 119,000 to 7.08 million - the second highest on record - in October. US job vacancies were ahead of the number of unemployed for an eighth straight month.

• On Wednesday the US Federal Reserve’s December monetary policy meeting minutes will be issued. And they will be dissected closely given the decision to increase rates and maintain the pace of balance sheet contraction.

• On Thursday, the all-important Chinese economic growth (GDP) report for the December quarter is released. The economy grew at a 6.5 per cent annual rate in the September quarter – the slowest annual growth rate in 9½ years. Full-year GDP growth is expected to be 6.6 per cent in 2018, but the 2019 annual growth target is expected to be lowered to 6-6.5 per cent due to ongoing headwinds from the US trade dispute.  

• Also on Thursday, Chinese consumer and producer prices are issued. Business inflation rose by 2.7 per cent in November from a year earlier, the slowest pace of growth in more than two years. Factory prices have weakened, despite stimulus measures, including personal tax cuts and support for private sector financing.  

• In the US on Thursday, the weekly data on new claims for unemployment insurance is released together with the new home sales and goods trade data. New home sales fell by 8.9 per cent to a seasonally adjusted annual rate of 544,000 units in October, the lowest level in 2½ years. 

• On Friday in the US, consumer prices data are released. Headline consumer prices were unchanged in November - the weakest reading in eight months - held back by falling gasoline prices. But underlying inflation pressures remained firm amid rising rents and healthcare costs. Core consumer prices increased by 0.2 per cent to an annual growth rate of 2.2 percent, up from 2.1 percent in October.

• Also on Friday, the monthly US Treasury Budget data is issued for December. The deficit increased to US$204.9 billion in November, up from US$138.5 billion a year ago.

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

Important Information: The summary and attached report has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information in this report, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice. In the case of certain securities Commonwealth Bank of Australia is or may be the only market maker.


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