AU Data
- Thursday 11.30 Building Capital Expenditure for Q4 2007 previous -9.4%
- Thursday 11.30 Capital Expenditure for Q4 2007 previous -6.5%
- Thursday 11.30 Plant & Machinery Expenditure for Q4 2007 previous -2.3%
- Friday 11.30 Housing Credit for January previous 0.8%
- Friday 11.30 Private Sector Credit for January previous 1.1%
AUD was well supported last week, underpinned by commodity prices and RBA minutes that revealed there was debate over a 50 baisi point rate hike ath the February meeting. The 25 basis point rate hike, to an 11-year high, is set to be followed by a further increase from the next central bank meeting on March 5. Focus this week will be on Capital Expenditure and Housing Credit.
NZ Data
- Tuesday RBNZ 2-year Inflation Expectations previous 2.7%
- Wednesday 08.45 Building Consents for January previous -5.2%
- Wednesday Business Confidence for February previous -24.9
- Thursday 08.45 External Migration & Visitors for January previous -0.60%
- Friday 08.45 Merchandise Trade for January previous NZD 3.64bln
Last week saw retail spending via electronic cards rise in January, but this was mainly due to higher fuel prices and does not change the view that core consumer spending is slowing. Confidence in the housing market is also showing signs of weakening a fact that will please the RBNZ, but official rates will remain on hold until clear signs of persistent inflation pressures are receding. On this note RBNZ Inflation Expectations on Tuesday will be watched closely by the market.
US Data
- Tuesday 02.00 Existing Home Sales for January previous -2.2%
- Tuesday 00.30 National Activity Index for January previous -0.91
- Wednesday 00.30 Core Produce Price Inflation for January previous 0.20% m/m, 2.0% y/y
- Wednesday 02.00 Consumer Confidence for February previous 87.9
- Wednesday 02.00 Richmond Fed Manufacturing Shipments for February previous -17.0
- Wednesday 02.00 Richmond Fed Services Index for February previous -12
- Thursday 00.30 Durable Goods Orders for January previous 5.0%
- Thursday 02.00 New Home Sales for January previous -4.70%
- Friday 00.30 Preliminary GDP for Q4 2007 previous 2.5%
- Friday 00.30 GDP Implicit Deflator for Q4 2007 previous 2.5%
- Saturday 00.30 Personal Income for January previous 0.50%
- Saturday 01.45 Chicago PMI for February previous 51.5
The threat of stagflation loomed over the US market as core CPI (+0.3% m/m), the strongest monthly rise since June 2006, Leading Indicators (-0.1%) and the Philadelphia Fed Business Index (-24.0) all damaged confidence in the economy. Equity markets and the USD remained under pressure and the prospect of a further 50 basis point reduction in official rates is still on the table as the FOMC meeting minutes revealed that threats to financial stability and real economy growth outweigh inflation concerns. A raft of data to be released this week will keep the market busy and volatility across all markets looks set to continue.
JPN Data
- Thursday 10.50 Industrial Output preliminary for January previous 1.4%
- Thursday 10.50 Retail Sales for January previous 0.2%
- Friday 10.15 Manufacturing PMI for February previous 52.3 Index
- Friday 10.30 All Households Spending for January previous 2.2%
- Friday 10.30 CPI core for January previous 0.8%
- Friday 10.30 Unemployment Rate for January previous 3.80%
- Friday 10.30 Jobs/Applicants Ratio for January previous 0.98
- Friday 16.00 Construction Orders for January previous 4.7%
- Friday 16.00 Housing Starts for January previous -19.2%
Last week's data saw Japan exports rise but the Trade Gap at its largest in 2 years. Export shipments to Asia and Europe were solid, while exports to the US softened. The overall trade deficit was adversely affected by higher crude oil and natural gas prices that drove up import bills. Japan's all industry index (-0.2% m/m) registered a second straight monthly fall and Reuters Tankan (9.0) the lowest for three years supported BoJ minutes that highlighted global economic and finacial concerns. The BoJ remains under pressure to reluctantly cut official rates later this year.
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 |