Investor Signposts: February 9, 2018
Jobs and consumer confidence are the key data drops next week.
Jobs report of main interest in Australia
- The January job report together with estimates of business and consumer confidence are the key indicators in Australia in the coming week.
- The week kicks off on Monday with the Reserve Bank to release the December credit and debit card statistics. In November the average credit card balance rose by $65.90 to $3,127.70 – the largest monthly increase in 12 months. But in smoothed terms (12-month average) the average balance was down by 0.7 per cent.
- On Tuesday the National Australia Bank releases its January monthly business survey. Business conditions are broadly the strongest in a decade and confidence is also improving. In fact the business confidence index rose from to 6.8 points to 11.1 points in December (long-term average 5.9 points).
- Also on Tuesday the Australian Bureau of Statistics (ABS) releases data on lending finance – covering housing, personal, commercial and lease loans. In November total new lending commitments rose by 9.5 per cent – the biggest rise in almost three years and to a 12-month high.
- The usual weekly ANZ-Roy Morgan weekly consumer sentiment results are also released on Tuesday. And the Assistant Governor (Economic) at the Reserve Bank, Luci Ellis, also is scheduled to address the Australian Business Economists forecasting conference.
- On Wednesday Westpac and the Melbourne Institute release the monthly measure of consumer confidence. This survey is now more of a check on the weekly consumer sentiment surveys.
- In January the Westpac/Melbourne Institute survey of consumer sentiment rose by 1.8 per cent to a 4-year high of 103.3. A reading above 100 denotes optimism.
- On Thursday the January employment report is due for release. In December employment rose for a record-equalling 15th straight month, up by 34,700 after rising by 63,600 in November. But the jobless rate rose from 5.4 per cent to 5.5 per cent. We expect records to be broken in January with employment lifting by 30,000 while the jobless rate may be stable at 5.5 per cent.
- On Friday Reserve Bank Governor Philip Lowe appears before the House of Representatives' Standing Committee on Economics. An update on monetary policy and recent economic developments is expected.
Overseas: Key US inflation data to be released
- The main interest in the US in the coming week is inflation data although retail sales, industrial production and housing starts will also compete for investor attention.
- The week kicks off in the US on Monday with the monthly budget statement for January.
- On Tuesday the usual weekly figures on chain store sales – a measure of consumer spending – are released.
- On Wednesday in the US the focus will shift to the Consumer Price Index (CPI) and retail sales figures. Economists expect that the headline CPI rose 0.3 per cent in January, leaving the annual rate at 2.1 per cent. The core measure (excludes food and energy) may have lifted 0.2 per cent in the month and 1.8 per cent on the year – still a tame inflation rate.
- US retail sales are seen posting a solid 0.4 per cent gain in February (or a 0.5 per cent gain if auto sales are excluded). Data on business inventories are also scheduled on Wednesday with the weekly data on mortgage finance.
- On Thursday the Producer Price Index (PPI) – the main measure of business inflation – is released with industrial production data. Influential regional surveys – Empire State manufacturing and Philadelphia Federal Reserve survey – are also scheduled with capital flows and the NAHB housing sentiment index. The usual weekly data on claims for unemployment insurance (jobless claims) is also down on the Thursday data docket.
- Economists tip a 0.3 per cent increase for the PPI and 0.2 per cent lift in the “core” measure. A firm 0.4 per cent rise in production is also forecast after the strong 0.9 per cent gain in December.
- On Friday the University of Michigan reports the preliminary estimate of consumer sentiment for February. Data on import and export prices is also scheduled with housing starts. Import prices may have lifted 0.5 per cent with a weaker greenback with export prices up 0.3 per cent. Housing starts have been affected by harsh winter weather in recent months but may have lifted 1.5 per cent in January after December's 8.2 per cent decline from near-decade highs.
- The Australian corporate reporting season shifts into top gear in the coming week.
- Amongst companies to report on Monday are Ansell, Aurizon, Bendigo & Adelaide Bank and JB Hi-Fi.
- On Tuesday, earnings include those from Boral, Cochlear, SG Fleet, Propertylink and Transurban.
- On Wednesday, profit results include those from CSL, Dexus, Goodman, IAG, Computershare, Ridley, Vicinity Centres, Villa World and Woodside Petroleum.
- The biggest day of the season is Thursday. Results include: ASX, Evolution Mining, Healthscope, Sonic Healthcare, McGrath Holding, Newcrest Mining, Origin Energy, Suncorp, Telstra and URB Investment.
- On Friday, earnings may include Medibank Private, Whitehaven Coal, iSelect, IOOF and Primary Health Care.
Craig James is the Chief Economist at CommSec
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