On Tuesday, the Reserve Bank releases minutes of the October Board meeting while lending finance data is released the same day. Analysts and investors will be closely reading the Board minutes to uncover the full justification behind the decision to cut interest rates. Comments about the international economy and the Australian dollar will dominate the focus.
And while the lending finance data doesn’t usually draw a lot of attention, it is the most comprehensive measure of borrowing in the community and a guide to overall financial conditions.
On Wednesday, final June quarter figures for building and overall construction activity are due.
On Thursday, the Bureau of Statistics releases the detailed labour market figures for September including a raft of regional and demographic group estimates. And on the same day, data on merchandise imports (imports of goods) for September is issued – one of the timeliest economic indicators.
Also on Thursday, Reserve Bank assistant governor Malcolm Edey delivers a speech to the International Swaps and Derivatives Association (ISDA) Annual Australia Conference.
In the US, the week kicks off on Monday with the release of September data for retail sales. Economists tip a 0.2% increase in the measure of sales that excludes gasoline and auto sales and building after the 0.1% fall in August. Headline sales are tipped to rise by 0.6%. A firmer job market and rising home prices and share prices are supporting spending.
Also on Monday, the Empire State manufacturing index is issued together with business sales and inventories figures.
On Tuesday, the consumer price index (CPI) for September is released together with data on industrial production, capital flows and the Housing Market sentiment index. The core CPI measure (excludes food and energy) probably rose by 0.2% after the tame 0.1% increase in August. And production is tipped to recover modestly, up by 0.3%, after the 1.2% decline in August.
On Wednesday, weekly housing finance data is released alongside data on housing starts. The housing recovery remains on track with economists tipping a 2.6% lift in starts.
On Thursday, the usual weekly data on claims for unemployment insurance is issued together with the monthly leading index and influential Philadelphia Fed index.
And on Friday, data on existing home sales for September is issued with a modest 1% decline tipped after two months of solid gains.
In China, inflation data for September is expected on Monday, while on Thursday the September quarter economic growth data is issued alongside retail sales, production and investment figures.
Sharemarket, interest rates, currencies and commodities
The US profit-reporting season cranks up a notch in the coming week. Investors are extremely wary about results over the season, given that consensus views point to a 1.3% fall in profits – the first decline in almost three years. Further, according to FactSet, 78% of the companies that have issued guidance on upcoming profit figures have trimmed forecasts. And according to Associated Press that is the worst reading since FactSet began keeping records six years ago.
On Monday, Citigroup and Charles Schwab are amongst 10 companies to report earnings. On Tuesday, 35 companies are expected to report, including Coca Cola, Domino’s Pizza, Goldman Sachs, IBM and Intel.
On Wednesday, Bank of America is amongst 73 companies to report earnings. Other companies include American Express and eBay. On Thursday, 96 companies are to issue results including Morgan Stanley, E*TRADE, Google, and Microsoft. And on Friday, 17 companies issue earnings results including General Electric and McDonald’s.
Craig James is chief economist at CommSec.
