AU Data
- Monday 11.30 Melbourne Institute Inflation Gauge previous 0.7%
- Tuesday 10.30 AIG Construction Index previous 29.5
- Tuesday 15.30 RBA Interest Rate Decision current 3.25%
- Wednesday 11.30 Westpac Consumer Sentiment previous -0.2%
- Wednesday 12.30 Home Loans previous 3.5% m/m
- Thursday 12.00 Melbourne Institute Inflation Expectations previous 2.2%
- Thursday 12.30 Employment Change previous 1.8k
- Thursday 12.30 Unemployment Rate previous 5.2%
Last week saw the Australian Industry Group’s Manufacturing (33.4) and Services (35.6) indices both improve slightly on the previous month but still languish below 50 denoting contraction and only marginally above record lows. Housing remains a bright spot for the economy with New Home Sales rising 3.9% and Building Approvals up 7.8% m/m both boosted by low interest rates and government incentive packages. Retail Sales were the big disappointment of the week, falling 2.0% m/m and recording the biggest monthly decline in 9 years. The retail sector employs 25% of the workforce and continued weak readings will inevitably impact employment data. The latest employment numbers will be watched closely on Thursday as the unemployment rate edges inexorably towards, but hopefully short of, double digits. The RBA will also take centre stage this week with its interest rate decision; market expectations are unusually spread between no change and a 50 basis point cut but with IMF and OECD global growth being revised sharply down again, further cuts seem inevitable if not now then in coming months.
NZ Data
- Tuesday 09.00 NZIER Business Confidence previous -64
Last week saw New Dwelling Consents (+11.6% m/m) rebound in February and record the first increase in 3 months. The number was welcome relief after January’s dismal drop of 13.1% m/m that was the lowest monthly total since the series began in 1982. February consents were still 40% lower than the same month last year. NBNZ Business Confidence survey showed that 39.3% expect conditions to deteriorate over the coming year, a slight improvement on the previous month but conditions clearly remain very tough with the sub-sections of investment intentions (19%) falling another 3% and export intentions recording a mere 3% expecting positive growth. A thin local data diary this week will have eyes firmly focussed on US data for signs of any significant improvements in what is still the world’s biggest economy.
US Data
- Wednesday 01.00 IBD/TIPP Economic Optimism previous 45.3
- Wednesday 06.00 Consumer Credit previous 1.8b m/m
- Thursday 01.00 Wholesale Inventories previous -0.9% m/m
- Thursday 05.00 FOMC Meeting Minutes
- Thursday 23.30 Trade Balance previous 36.0b
- Thursday 23.30 Unemployment Claims previous 669k
- Thursday 23.30 Import Prices previous -0.2% m/m
- Friday 05.00 Federal Budget Balance previous -192.8b
US manufacturing continues to contract, as reported last week the Chicago PMI (31.4) and ISM Manufacturing PMI (36.3) remain well below 50 that separates contraction from expansion and with the ISM Non-manufacturing Index (40.8) still falling the outlook for employment prospects is still extremely gloomy. Factory Orders (+1.8% m/m) and Pending Home Sales (+2.1% m/m) provided some hope that the combination of low interest rates and massive fiscal stimulus is starting to feed through into the real economy. The closely watched Non-farm Payroll (-663k) series, though still very bad, was within market expectations, as was the Unemployment Rate that jumped up to 8.5% from 8.1% a fresh 25-year high. The major stock indices all managed to make gains on the week (DJIA +3.1%, S&P 500 +3.3% and NASDAQ +5%), buoyed by hope surrounding the G20 summit but eventually positive data will be required to underpin this rally if upside momentum is to continue. The FOMC meeting minutes will be of interest this week as the market analyses the thinking behind the surprise quantitative easing announcement of March 18.
JP
N Data
- Monday 16.00 Leading Indicators previous 77.2%
- Tuesday BOJ Interest Rate Decision current 0.10%
- Wednesday 10.50 Current Account previous 0.26t
- Wednesday 16.00 BOJ Monthly Report
- Wednesday 16.00 Economy Watchers Sentiment previous 19.4
- Thursday 10.50 Core Machinery Orders previous -3.2% m/m
- Thursday 17.00 Preliminary Machine Tool Orders previous -84.4% y/y
- Friday 10.50 Monetary Policy Meeting Minutes
The Japanese economy continues to contract at a frightening pace with no relief on the horizon. Last week’s BOJ Tankan corporate survey showed business confidence slumping at its fastest pace on record to an all-time low in Q1 2009. The manufacturers’ index was down 34 points to -58 and the non-manufacturers index down 22 to -31, indicating the breadth of the slowdown is spreading across the whole economy as Japan struggles with its worst recession since the 1940s. Not surprisingly, the Unemployment Rate (4.4%) continues to climb and Household Spending (3.5% y/y) is falling as job prospects deteriorate on a daily basis. The BOJ interest rate decision will be a non-event this week and eyes will be focussed beyond Japan’s borders for the source of recovery for this heavily export reliant nation.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
3.25% |
-100bps |
03/02/09 |
7th April |
| NZ (RBNZ) |
3.00% |
-50bps |
12/03/09 |
30th April |
| US (FED) |
0-0.25% |
-75bps |
16/12/08 |
29th April |
| JPN (BOJ) |
0.10% |
-20bps |
19/12/08 |
7th April |