AU Data
- Monday 10.30 TD-MI Inflation Gauge for March previous 0.3%
- Monday 11.30 Private Sector Credit for February previous 1.1%
- Tuesday 14.30 RBA Rate Decision
- Friday 11.30 Retail Sales for February previous 0.0%
All eyes this week will be on inflation data and the RBA rate decision; no change in the official rate is expected this time round but little relief for consumers is seen in the near future, as the inflation rate remains stubbornly high and outside the RBA target zone. The AUD continues to under perform against all the major currencies, including the USD, as risk aversion and worries over funding the current account deficit undermine investor confidence.
NZ Data
- Monday 08.45 Building Consents for February previous 3.3%
Strong NZ growth in Q4 2007 (+1.0%) gave the NZD a brief boost last week but concerns remain that although the Current Account Deficit narrowed in Q4 2007 ($13.83 bln from $14.28 bln) it will remain large for some time and continued global financial market turmoil will make funding such deficits a challenge. In a presentation last week, RBNZ Governor Bollard acknowledged that global financial market turmoil and fragile risk appetite would be a drag on the economy but strong terms of trade that support export revenues, higher government spending and personal tax cuts will limit a domestic slowdown.
US Data
- Monday 24.00 NY National Association of Purchasing Managers Index previous 427.7
- Tuesday 00.45 Chicago PMI for March previous 44.5
- Wednesday 01.00 Construction Spending for February previous -1.7%
- Wednesday 01.00 ISM Manufacturing for March previous 48.3
- Wednesday 01.00 ISM Prices for March previous 75.5
- Wednesday 22.30 Layoffs for March 72.091k
- Thursday 01.00 Factory Orders for February previous -2.5%
- Thursday 00.30 Fed Chairman Bernanke testifies to Congress on Economic Outlook
- Friday 23.30 Non-farm Payrolls for March previous -63.0k
- Friday 23.30 Unemployment for March previous 4.8%
Last week saw Consumer Confidence plunge to a 5 year low, Consumer Future Expectations at a 34 year low and tame inflation data all point to another 50 basis point rate cut on April 30. As bad as the economic data is, still the major concern for the Fed is the health of the financial system. Money market rates eased slightly last week due to quarter end factors but underlying reluctance of money centre banks to lend to each other continues to undermine the market. Rumours of further bank difficulties and analysts downgrading bank profit and dividend forecasts only add to the lack of confidence and mistrust.
Much data to focus attention this week but it is likely that unscheduled comments and releases will be the real market movers; though Fed Chairman Bernanke testimony, Factory Orders and Non-Farm Payrolls will be closely scrutinised.
JPN Data
- Monday 10.15 Manufacturing PMI for March previous 50.8
- Monday 10.50 Industrial Output for February previous -2.2%
- Monday 12.30 Overtime Pay for February previous -0.1% y/y
- Monday 16.00 Housing Starts for February pervious -5.7% y/y
- Monday 16.00 Construction Orders for February previous -2.5% y/y
- Tuesday 10.50 Tankan Big Manufacturers Diffusion Index for Q1 previous 19.0
- Tuesday 10.50 Tankan Capital Expenditure Estimate for Q1 previous 10.5%
Japan’s Trade Surplus (JPY 969.968 bln) continues to show some resilience despite the inevitable slowing of exports to the US. Exports to the US fell 6.0% from a year earlier and now only attract 20% (previously 30%) of total export trade. Asia and Europe continue to gain importance as destinations for exports, with China particularly strong gaining 15% on the year to February. Core Consumer Prices (+1.0%) were above market expectations but a sluggish domestic economy and on-going global financial market turmoil mean that the BOJ is still more likely to cut rates than raise. The Tankan will be the major market focus this week, though US data continues to dominate market attention.
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 |