Also on Thursday, data on new homes sales is released for October. The September figures were weak, with sales down 3.7% to 15-year lows. But building approvals are rising as new home buyers respond to government grants, so a recovery in sales is expected over the next few months.
And on Friday the Reserve Bank issues data on private sector credit or loans outstanding. Consumers and businesses aren’t keen to take on debt, but home lending is rising modestly, so we expect that credit lifted by around 0.3% in October.
In the US, the week kicks off on Monday with the Dallas and Chicago Federal Reserve surveys. But on Tuesday there are at least four indicators vying for attention. The Case-Shiller survey of home prices is issued alongside another gauge of prices from the Federal Housing Finance Agency. While they provide different perspectives, the key finding from each is that home prices are lifting in response to a better supply-demand equation.
Also on Tuesday, the consumer confidence reading for November is issued together with orders of durable goods for October. Economists tip a modest lift in consumer confidence from 72.2 to 73.0. Meanwhile durable goods orders are expected to ease just 0.3pct after a solid 9.8% increase in September.
However, excluding defence goods and aircraft (broader business investment), a modest 0.3% rise is tipped after a flat result in September. Two key regional gauges – the Dallas Fed services and Richmond Fed indexes are also released on Tuesday.
On Wednesday, data on new home sales for October is released together with the Federal Reserve Beige Book. Economists tip little change in new home sales in October after a 5.7% lift the previous month. And the Fed Beige Book will give some sense of how far along, and how broad-based, is the economic recovery.
On Thursday the usual weekly data on claims for unemployment insurance is released in the US together with economic growth (GDP) figures for the September quarter and pending home sales data. The advance estimate suggested the US economy grew at a 2.0% annual pace in the September quarter and the preliminary (second) estimate should show a slightly larger result around 2.8%.
And on Friday, personal income and spending figures are released in the US together with the influential Chicago purchasing managers index. Economists expect a 0.2% lift in income and a more modest 0.1% lift in spending in October.
Sharemarket, interest rates, currencies and commodities
The Aussie dollar stands at US103.6 cents, but probably more important it stands at 76.9 on the broader trade weighted index. That TWI of 76.9 is just 3% away from the March 2, 2012 result and that was the highest level in 27 years.
The Aussie dollar has a little further to travel against the greenback to reach historic highs. The Aussie hit a 29-and-a-half year high of US110.80 on July 27, 2011 and currently it is about 6 % away from these heady heights. The Aussie is also 5% away from the 27-year high set against the British pound on February 15, 2012. And the Aussie stands at 80.8 euro cents, down 6% on the 22-year high of almost 86 euro cents set on August 6 this year.
The bottom line is that the Aussie dollar continues to hover not far off the highest levels in a generation against major currencies and just 3% from highs on a trade weighted basis. By comparison, the current Reserve Bank commodity index in currency-neutral SDR terms is 20% below the July 2011 high.
Craig James is chief economist at CommSec.
