AU Data
- Monday 11.30 Housing Finance for February previous 2.3%
- Monday 11.30 Investment Housing Finance previous 8.3%
- Thursday 11.30 Merchandise Imports for March previous 16.7 bln
- Friday 11.30 Export Prices for Q1 2008 previous -0.6%
- Friday 11.30 Import Prices for Q1 2008 previous 0.2%
Last week’s data saw Business Conditions (7, lowest for 5 years) and Business Confidence (-4) slump in March as sales and profits were squeezed by consumers worried about high interest rates and future economic prospects. Falling consumer confidence was highlighted by Consumer Sentiment (87.4), which was the lowest reading since June 1993. The Trade Deficit (A$3.289 bln) blew out to a record in February, hit by bad weather and supply bottlenecks that resulted in exports falling 4.0%. Exports will rebound but the overall soft tone in the domestic economy will not be lost on the RBA that will welcome an easing of pressure for them to raise rates further.
NZ Data
- Monday 08.45 Retail Sales ex-auto for February previous 0.3% sa
- Monday 08.45 Retail Sales for February previous 0.3%
- Monday 13.00 RBNZ Offshore Holdings for March previous 71.7%
- Tuesday 08.45 Consumer Price Index for Q1 2008 previous 1.2%
- Tuesday 08.45 Food Price Index for March previous 0.8%
Manufacturing activity (PMI -3.5 to 48.3) contracted for the first time in more than two years in March as consumer and business confidence, falling demand and a high currency all took their toll. On a positive note, the free trade agreement signed this week with China should encourage manufacturers to look outside domestic markets that are inevitably feeling the consequences of overseas financial and economic instability. This week, Retail Sales and Q1 2008 CPI will give further evidence of the pace of domestic slowdown and potential scope for RBNZ interest rate easing later in 2008.
US Data
- Monday 22.30 Retail Sales for March previous -0.6%
- Monday 00.00 Business Inventories for February previous 0.80%
- Tuesday 22.30 NY Fed Manufacturing for April previous -22.23
- Tuesday 22.30 Producer Prices for March previous 0.3%
- Tuesday 22.30 Producer Prices Core for March 0.5%
- Wednesday 03.00 NAHB Housing Index for April previous 20
- Wednesday 22.30 Building Permits for March pervious -7.3%
- Wednesday 22.30 CPI Inflation for March previous 0.0% sa
- Wednesday 22.30 Housing Starts for March previous -0.6%
- Wednesday 22.30 Real Weekly Earnings for March 0.3%
- Wednesday 23.15 Capacity Utilisation for March previous 80.4%
- Wednesday 23.15 Industrial Output for March previous -0.5%
- Thursday 00.00 Leading Indicators for March previous -0.3%
- Thursday 00.00 Philadelphia Fed Business Index for April previous -17.4
Data releases last week gave little indication that economic conditions are improving in the US. The Trade Deficit ($62.3 bln, +5.7%) unexpectedly widened and US chain stores suffered their worst March since 1995. Consumers lack both disposable income and confidence to make large, non-essential purchases and this combined with cold weather saw retail sales fall 0.5% from a year earlier. A full data calendar this week will be watched closely for any positive signs of the economy stabilising with any good news seized upon by traders and bad news, especially as far as housing and retail activity, already largely discounted.
JPN Data
- Monday 10.50 BOJ Policy Meeting Minutes for March
- Thursday 10.30 Reuters Tankan Divergence Index for April previous 8.0
- Thursday 15.30 Revised Industrial Output for February previous -1.2%
- Friday 16.00 Consumer Confidence Index for March previous 36.1
Japan’s corporate sector profits continue to be squeezed by rising wholesale prices (+3.9% from year earlier), notably oil and raw materials, which threaten to reduce the capital spending that has driven the domestic economy since 2002. This supports data from the Tankan that large Japanese corporates plan to cut capital spending by 1.6% in the financial year started on April 1. The BOJ acknowledged this drag on the economy after the rate announcement (official rates unchanged) and dropped its 1.5 year old reference that the economy is expanding. However, rates are still not expected to fall this year, unless overseas conditions take a dramatic downturn, and rate increases are forecast in 2009 by majority of analysts.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
7.25% |
+25bps |
04/03/08 |
6th May |
| NZ (RBNZ) |
8.25% |
+25bps |
26/07/07 |
24th April |
| US (FED) |
2.25% |
-75bps |
18/03/08 |
30th April |
| JPN (BOJ) |
0.50% |
+25bps |
21/02/07 |
9th April |