AU Data
- Tuesday 11.30 Merchandise Imports for January previous -0.3% y/y
- Wednesday 10.30 Leading Index for December previous 1.0% m/m
- Thursday 11.00 DEWR Skilled Vacancies for February previous 1.1% m/m
- Thursday 11.30 Wage Price Index for Q4 2007 previous 1.0% q/q
- Friday 11.30 New Motor Vehicle Sales for January previous 11.6% y/y
- Friday 11.30 RBA Minutes
- Friday 14.30 Average Weekly Earnings for November previous 1.0 % m/m, 4.9% y/y
Last week Business Confidence at a 6 year low and weakening Consumer Sentiment (-5.5%), failed to dent market expectation of further increases in official rates. A hawkish RBA quarterly statement and a 33 year low in unemployment (4.1%) fuelled these expectations and the market is pricing in an 85% chance of another 25bps increase in March (up from 50% chance at start of last week). This week will be dominated by similar themes with the release of RBA minutes from their last meeting, Wage inflation data and Average Weekly Earnings.
NZ Data
- Tuesday 08.45 External Migration for 2007 previous 1.2% y/y
- Thursday 08.45 Electronic Card Transactions for January previous 7.6% y/y
Last week saw Retail Sales volumes rise less than expected in Q4, 2007, indicating that consumer spending is slowing as high interest rates start to bite. Output Producer Prices (+1.5% Q4 2007) highlighted the RBNZ's concern over inflation is warranted and that rates are unlikely to fall until well into H2 2008. Thin economic diary for this week will direct market attention to global economic concerns.
US Data
- Wednesday 04.00 NAHB Builders Survey for February previous 19 index
- Thursday 00.30 Buidling Permits for January previous 1,068k
- Thursday 00.30 Consumer Price Index for January previous 0.3% m/m
- Thursday 00.30 Housing Starts for January previous 1,006k
- Thursday 06.00 FOMC Minutes
- Friday 02.00 Leading Indicators for January previous -0.2% m/m
- Friday 02.00 Philadelphia Fed Survey for February -20.9 index
An unexpected jump in Retail Sales (+0.3% m/m) gave the USD a brief boost particularly against the JPY, hitting a 1 month high at 108.37. However market scepticism over the accuracy of the data did little to allay fears that a slowdown in consumer spending will undermine the dollar. This week the CPI, Leading Indicators and the FOMC will give further clues as to how far official rates will have to fall to support the economy and assist banks rebuild their damaged balance sheets.
JPN Data
- Monday 10.30 Tankan for January previous 17.0 index
- Monday 16.00 Leading Indicator for December previous 40.0 index
- Thursday 10.30 All Activity Index for December previous -0.5% m/m
- Thursday 10.30 Custom Cleared Trade for January previous Yen 877.9bn
GDP growth surprised the market last week growing at 0.9% in Q4 2007. External demand and captial expenditure under-pinned the rise and showed the resilience of the Japanese economy. Exports grew for an 11th straight quarter, with emerging markets, particularly auto sales to the Middle East, the prime driver. The BoJ kept rates on hold as expected. Monday's Leading Indicator and Tankan will be the focus for the market this week.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
7.00% |
+25bps |
05/02/08 |
5th March |
| NZ (RBNZ) |
8.25% |
+25bps |
26/07/07 |
6th March |
| US (FED) |
3.00% |
-50bps |
31/01/08 |
18th March |
| JPN (BOJ) |
0.50% |
+25bps |
21/02/07 |
7th March |