AU Data
- Thursday 11.30 Job Vacancies Q1 2008 previous 6.0%
RBA minutes released last week highlighted the concerns that inflation would remain uncomfortably high for some time (not to fall below 3% until mid 2010) and left the door open for further hikes if current financial conditions and potential credit rationing prove not to be restrictive enough. The economic calendar is very thin this week but volatile markets are expected to persist as markets wrestle with almost daily reversals in sentiment, rumour and official market smoothing counter measures.
NZ Data
- Thursday 08.45 Current Account for Q4 2007 previous -8.3%
- Thursday 08.45 Exports for February previous 3.08 bln
- Friday 08.45 GDP Headline for Q4 2007 previous 0.5%
As has been the case for many weeks, NZ government institutions and the RBNZ can only concentrate on keeping their own house in order but remain at the mercy of events in other parts of the world. Attention will therefore inevitably be focused on the US and the on-going battle to maintain confidence in a wobbly financial system.
US Data
- Tuesday 01.00 Existing Home Sales for February previous 4.89 mln
- Wednesday 01.00 Consumer Confidence for March previous 75.0
- Wednesday 23.30 Durable Goods Orders for February previous -5.10
- Thursday 01.00 New Home Sales for February previous 0.588 mln
- Thursday 23.30 Jobless Claims for w/e 378k
- Friday 01.00 Help Wanted for February previous 21.0
- Friday 23.30 Personal Consumption Expenditure for February previous 0.3% m/m
The Federal Reserve duly cut rates by 75 bps and the USD ended the week on a positive note as equity markets rallied and commodities were sold aggressively ahead of the long weekend. This week will be pivotal for the USD in terms of the next 3-4 weeks trend; if some stability starts to show in financial markets, some confidence that the worst is over and that the Fed have been able to control the damage, the USD may retrace to levels that were unlikely just 7 days ago. This confidence is not justified yet, but momentum for USD depreciation has certainly been lost for the moment.
JPN Data
- Wednesday 10.50 Exports for February previous 7.7% y/y
- Wednesday 10.50 Imports for February previous 9.0% y/y
- Friday 10.30 Household Spending for February previous 3.6%
- Friday 10.30 National CPI for February previous 0.8%
- Friday 10.30 Unemployment for February previous 3.8%
- Friday 10.50 Retail Sales for February previous 1.5%
Markets will focus on any early signs that a strong JPY is affecting export markets and how domestic spending is holding up in the face of confidence sapping credit problems in the US. The JPY hit a 13 year high (95.77) against the USD early last week, though profit-taking in relatively thin markets saw some consolidation to 99.60 by week end. Quarter end window dressing may account for this price action as it is far from clear that further shocks are not lurking just around the corner.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
7.25% |
+25bps |
04/03/08 |
1st April |
| 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 |