AU Data
- Tue Tentative HIA New Home Sales previous 0.5%
- Tue 11.30 Private Sector Credit previous 0.1% m/m 0.2%
- Wed 09.30 AIG Manufacturing Index previous 37.5
- Wed 11.30 Building Approvals previous 5.1% m/m expectation 3.3%
- Wed 11.30 Retail Sales previous 0.3% m/m expectation 0.5%
- Wed 16.30 Commodity Prices previous -23.3% y/y
- Thu 11.30 Trade Balance previous -.09B expectation -0.1B
- Fri 09.30 AIG Services Index previous 39.9
A sparse data diary last week still managed to provide some positive sentiment to the market. New Motor Vehicle Sales in May rose 5.4% from the previous month and registered the strongest monthly gain since January 2005; however sales are still down 12.6% when compared to a year earlier. This strong number reflects that fiscal and monetary pump-priming is feeding through to the real economy and bodes well for Retail Sales to be released this Thursday. The New York based Conference Board released its Leading Index that increased 0.7% from a month earlier and has been steadily improving since bottoming in January 2009; the series was particularly bolstered by increases in share prices and building approvals in April. This week, Retail Sales and AIG’s two releases on manufacturing and services will be watched closely for continued improvement.
NZ Data
- Mon 08.45 Building Consents previous 11.2% m/m
- Mon 08.45 Trade Balance previous 276M expectation 250M
- Tue 13.00 NBNZ Business Confidence previous 1.9
- Thu 13.00 ANZ Commodity Prices previous 2.7%
Last week started in positive fashion with Visitor Arrivals (+1.0% y/y) showing the biggest increase in long-term migrants in 6 years, and Consumer Sentiment (106.0) breaking through the significant 100.0 level (indicating optimist outnumber pessimists) and hitting an 18 month high. However the positive tone was given a sharp dose of reality on Friday with Q1 GDP (-1.0% q/q) coming in worse than market expectations (-0.7%q/q) and recording a 5th consecutive quarterly decline and showing no sign as yet that the recession has bottomed. Hopefully this week’s more current and forward looking data releases will paint a more upbeat picture with Building Consents and Business Confidence to be watched closely.
US Data
- Tue 23.00 S&P/CS Composite-20 HPI previous -18.7% y/y expectation 18.6%
- Tue 23.45 Chicago PMI previous 34.9 expectation 38.8
- Wed 00.00 CB Consumer Confidence previous 54.9 expectation 55.2
- Wed 21.30 Challenger Job Cuts previous 7.4% y/y
- Wed 22.15 ADP Non-Farm Employment Change previous -523K expectation -410K
- Thu 00.00 ISM Manufacturing PMI previous 42.8 expectation 44.1
- Thu 00.00 Pending Home Sales previous 6.7% m/m expectation 1.1%
- Thu 00.00 Construction Spending previous 0.8% m/m expectation -0.5%
- Thu 00.00 ISM Manufacturing Prices previous 43.5 expectation 46.8
- Thu 00.30 Crude Oil Inventories previous -3.8M
- Thu All Day Total Vehicle Sales previous 9.9M expectation 9.8M
- Thu 22.30 Non-Farm Employment Change previous -345K expectation -375K
- Thu 22.30 Unemployment Rate previous 9.4% expectation 9.6%
- Thu 22.30 Average Hourly Earnings previous 0.1% m/m expectation 0.2%
- Thu 22.30 Unemployment Claims previous 627K
- Fri 00.00 Factory Orders previous 0.7% m/m expectation 0.2%
- Fri 00.30 Natural Gas Storage previous 94B
- Fri All Day Bank Holiday
Housing data released last week was mixed, but did show some signs that this crucial area of the economy is starting to stabilise. Existing Home Sales (+2.4% m/m) rose for the 2nd straight month and though below market expectations recorded the first back-to-back gain since September 2005. Despite improving sales, prices continue to drop with the House Price Index (-0.1% m/m) showing that prices fell in five of the nine areas surveyed and are now currently down 6.8% from a year earlier. New Homes Sales slipped slightly in May (342k from 352k the previous month) but inventories of new homes fell 2.3% to 292k, which is the lowest level since March 2001. Elsewhere, the Richmond Fed Manufacturing Index improved slightly from +4 to +6, with the service sector still weighing heavily on this series. Durable Goods Orders beat market expectations (+1.8% m/m) and May’s increase was the third gain in four months; importantly, non-defence capital goods orders excluding aircraft, a proxy for business capital spending, jumped 4.8%, which is the largest gain since September 2004. Finally, the Fed Reserve left rates unchanged at 0.25%, commented that the pace of contraction was slowing and that rates were to be kept low for an extended period.
JP
N Data
- Mon 09.50 Prelim Industrial Production previous 5.9% m/m expectation 6.9%
- Mon 09.50 Retail Sales previous -2.8% y/y expectation 2.7%
- Tue 09.15 Manufacturing PMI previous 46.6
- Tue 09.30 Household Spending previous -1.3% y/y expectation -1.3
- Tue 09.30 Unemployment Rate previous 5.0% expectation 5.2%
- Tue 11.30 Average Cash Earnings previous -2.7% y/y expectation -3.0%
- Tue 13.00 Housing Starts previous -32.4% y/y expectation -27.7%
- Wed 09.50 Tankan Manufacturing Index previous -58 expectation -43
- Wed 09.50 Tankan Non-Manufacturing Index previous -31 expectation -26
- Thu 09.50 Monetary Base previous 7.9% y/y expectation 8.1%
The Business Survey Index (-13.2 from -66) showed that large Japanese manufacturers grew less pessimistic about business conditions in the three months to June compared with the previous quarter, and is a sign that the world’s number two economy may be emerging from its worst recession in decades. The survey bodes well for the BOJ Tankan to be released this week but with the service sector still very weak any recovery is unlikely to be broad based. Deflation rather than inflation continues to dominate domestic policy as highlighted by Consumer Prices that declined by a record 1.1% in the year to May, with falling demand responsible for Japan’s second bout of deflation in two years. Deepening deflationary pressure will make the BOJ less willing to end unconventional quantitative measures that are due to expire in September. This week the BOJ’s Tankan will be the main focus of attention.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
3.00% |
-25bps |
07/04/09 |
7th July |
| NZ (RBNZ) |
2.50% |
-50bps |
30/04/09 |
30th July |
| US (FED) |
0-0.25% |
-75bps |
16/12/08 |
11th Aug |
| JPN (BOJ) |
0.10% |
-20bps |
19/12/08 |
15th July |