AU Data
- Mon 09.30 AIG Manufacturing Index previous 38.4 Actual 44.5
- Mon 11.30 ANZ Job Advertisements previous -6.7% m/m
- Tue 11.30 Retail Sales previous 1.0% m/m expectation 0.5% m/m
- Tue 11.30 House Price Index previous -2.2% q/q expectation 0.1% q/q
- Tue 14.30 RBA Interest Rate Decision previous 3.0% expectation 3.0%
- Tue 16.30 Commodity Prices previous -29.3%
- Wed 09.30 AIG Services Index previous 50.2
- Wed 11.30 Trade Balance previous -0.56b expectation -0.79b
- Thu 11.30 Employment Change previous 21.4k expectation -17.8k
- Thu 11.30 Unemployment Rate previous 5.8% expectation 6.0%
- Fri 09.30 AIG Construction Index previous 42.6
- Fri 11.30 RBA Monetary Policy Statement
NAB Quarterly Business Conditions (+11 points to -9) and Confidence (+20 points to -4) both improved significantly from the depths seen in Q1 but expectations for the next 12 months remain very cautious and stuck at historically low levels not seen since June 1991. Capacity Utilisation steadied at 80% as firms continue to run-down inventory. RBA Governor Stevens fueled speculation that official interest have bottomed in a speech that described the risks to the economy as balanced and warned of a potential housing bubble. The market reacted by starting to discount a rate hike as early as December and this week’s Monetary Policy Statement will be watched closely for indications of an early move towards a more neutral policy stance in the months ahead. New Home Sales (+0.5% m/m) for H1 2009 are now up 13% from the same period a year ago and with the Melbourne Institute Inflation Gauge rising by a record 0.9% m/m in July the chances of further monetary stimulus have declined sharply. A broad spread of data this week will give a good indication of activity in the economy while Australian corporate earnings will also be watched for further evidence of an improving outlook.
NZ Data
- Tue 08.45 Labour Cost Index previous 0.5% q/q expectation 0.5% q/q
- Tue 13.00 ANZ Commodity Prices previous 0.2% m/m
- Thu 08.45 Employment Change previous -1.1% q/q expectation -0.6% q/q
- Thu 08.45 Unemployment Rate previous 5.0% expectation 5.6%
NBNZ survey of Business Confidence recorded its highest level since March 2002 with a net 19% (+13% from the previous month) of respondents expecting an improvement in general conditions over next 12 months. Confidence improved across all sectors with manufacturers posting the largest increase but sentiment will need to be backed up with hard sales and new orders before long, as profits and employment expectations remain weak. The uncertain nature of the domestic outlook was highlighted by the RBNZ that kept official interest rates unchanged at 2.5% and repeated its pledge to keep rates low until late 2010, citing that risks still remain to the downside despite some signs of stabilization in domestic and global activity. Another motive for keeping official rates low is to suppress the value of the NZ$, which the central bank has already identified as crucial to fostering any nascent recovery.
US Data
- Tue 00.00 ISM Manufacturing PMI previous 44.8 expectation 46.4
- Tue 00.00 Construction Spending previous -0.9% m/m expectation 0.5% m/m
- Tue 00.00 ISM Manufacturing Prices previous 50.0 expectation 51.0
- Tue Tentative Total Vehicle Sales previous 9.7m expectation 9.9m
- Tue 22.30 Core PCE Price Index previous 0.1% m/m expectation 0.2% m/m
- Tue 22.30 Personal Spending previous 0.3% m/m expectation 0.3% m/m
- Tue 22.30 Personal Income previous 1.4% m/m expectation -0.9% m/m
- Wed 00.00 Pending Home Sales previous 0.1% m/m expectation 0.6% m/m
- Wed 21.30 Challenger Job Cuts previous -9.0% y/y
- Wed 22.15 ADP Non-farm Employment Change previous -473k expectation -335k
- Thu 00.00 ISM Non-manufacturing PMI previous 47.0 expectation 48.1
- Thu 00.00 Factory Orders previous 1.2% m/m expectation -0.5% m/m
- Thu 22.30 Unemployment Claims previous 584k expectation 593k
- Fri 22.30 Non-farm Employment Change previous -467k expectation 333k
- Fri 22.30 Unemployment Rate previous 9.5% expectation 9.6%
- Fri 22.30 Average Hourly Earnings previous 0.0% expectation 0.1%
- Sat 05.00 Consumer Credit previous -3.2b expectation -3.7b
The Federal Reserve’s Beige Book report showed that economic activity in most of its 12 regions was declining at a slower pace but consumer spending, residential and commercial real estate, tourism and labour markets remain soft at best with few signs of outright growth. The Case Schiller House Price Index supported the stabilisation story with the -17.1% annualised number showing the pace of decline lessening for the 4th straight month and the month-on-month figure (+0.5%) actually recording the 1st monthly increase since July 2006. Headline Durable Goods registered a disappointing 2.5% monthly decline in June, but after stripping out the volatile transportation component (e.g. civilian aircraft) new orders rose by 1.1%, which is the biggest monthly advance in 4 months. Advanced Q2 GDP (-1.0% annualised) beat market expectation, but Q1 GDP was revised down from -5.5% to -6.4%, confirming that the worlds largest economy had suffered the worst downturn since the Great Depression. GDP has now fallen for 4 straight quarters for the first time since records began in 1947. Business activity in the US Midwest, previously hit hard by the auto industry problems, showed some signs of life as the Chicago PMI rebounded from 39.9 to 43.4 in July and recorded its highest reading since September 2008. This week will be dominated by employment data due for release on Friday.
JP
N Data
- Mon 11.30 Average Cash Earnings previous -2.5% y/y expectation -3.6% y/y
- Tue 09.50 Monetary Base previous 6.4% y/y expectation 6.8% y/y
- Thu 15.00 Leading Indicators previous 76.9% expectation 79.8%
The Manufacturing Purchasing Managers Index rose to 50.4 in July, recording its highest level since February 2008 and climbing above 50, which separates expansion from contraction, for the first time in 17 months. The Output (54.7 from 50.6) and New Export Orders (52.7 from 51.2) components of the Index both gained for the 6th straight month as Japanese manufacturers started to rebuild depleted overseas inventories. The importance of exports markets to Japan was starkly highlighted as domestic consumer activity and prices continue to slump. Retail Sales (-3.0% y/y) fell more than expected as worsening employment and income conditions more than offset government stimulus measures. Core Consumer Prices (-1.7% y/y) declined for the 4th straight month and at a record pace, as the country slipped into its second bout of deflation this decade. Construction activity is also suffering as seen in Housing Starts (-32.4% y/y) and New Orders (-28.0% y/y) that have now fallen for 7 and 8 straight months respectively. A much quieter data diary this week will allow traders to focus on Japanese company earnings and prospects for growth in vital overseas export markets.
Interest rate outlook
| Country |
Current rate |
Last change |
Date of change |
Next meeting |
| AUS (RBA) |
3.00% |
-25bps |
07/04/09 |
4th Aug |
| NZ (RBNZ) |
2.50% |
-50bps |
30/04/09 |
10th Sep |
| US (FED) |
0-0.25% |
-75bps |
16/12/08 |
11th Aug |
| JPN (BOJ) |
0.10% |
-20bps |
19/12/08 |
11th Aug |