A busy week on the domestic calendar
A relatively busy week lies ahead for Australian economic data, while it’s a little more subdued in the US. China will release key monthly activity indicators and next weekend’s G20 meeting in Brisbane will also be on the agenda.
In Australia, the week kicks off on Monday with the latest data on home loans. In August, the number of home loans fell by 0.9 per cent and this led to some speculation that the market was peaking. Well, that speculation may extend for another month with Bankers Association data suggesting that the number of home loans fell a further 3 per cent in September. No doubt higher home prices would be inducing greater caution among budding home buyers.
On Tuesday, the National Australia Bank releases its latest business survey. In the September survey, both business conditions and confidence eased. However consumer spending and confidence levels lifted over September and this may have served to spur more optimism among businesses last month. Certainly business balance sheets are in good shape.
Also on Tuesday weekly consumer sentiment data is released together with the Australian Bureau of Statistics residential property price indexes -- a check on the timelier CoreLogic-RP Data home value index. Chris Aylmer, head of the Reserve Bank’s domestic markets department, delivers a speech on Tuesday at the Australian Securitisation Conference
On Wednesday, there is a bevy of announcements to watch: a monthly reading on consumer confidence, data on credit and debit card lending, broader lending finance figures and the September quarter wage price index.
Arguably the most important of these events is the wage data. In the June quarter, wages only rose 0.6 per cent to be up 2.6 per cent over the year -- the slowest annual wage growth in the near 17-year history of the survey. If wage growth remains constrained, so will inflation and interest rates. We are tipping 2.7 per cent annual wage growth in the September quarter.
On Thursday, the ABS will release detailed employment estimates for October, including unemployment data for regional areas and demographic groups. On the same day, Christopher Kent, Reserve Bank Assistant Governor (Economic), will deliver a speech at an Australian Business Economists event.
Overseas: Chinese activity data in focus
A relatively rare situation exists in the US in the coming week: a quiet week for economic data.
The week kicks off on Monday with the monthly Employment Trends report.
On Tuesday, the usual weekly data on chain store sales is released together with the National Federation of Independent Business (NFIB) issuing its small business optimism index.
On Wednesday, the usual weekly data on mortgage lending is issued with data on wholesale sales and inventories.
On Thursday, the JOLTS series of job openings is issued, with monthly Federal Budget figures and the usual weekly figures on claims for unemployment insurance.
And on Friday in the US, finally some ‘top shelf’ data is issued for investors to dissect. Retail sales data for October is issued, while the University of Michigan releases preliminary consumer sentiment figures for November.
Consumer confidence is at the highest levels in 7 years, while inflation is negligible. As a result, spending probably rose in October, although the expected 0.2 per cent gain would hardly be earth-shattering.
In China, there are a number of indicators that bear watching. On Monday, the National Bureau of Statistics will release the October data on consumer and producer prices. Somewhat perversely, a lift in inflation would be seen as positive -- suggestive of higher spending and activity more generally. The APEC summit is also held in Beijing from November 8-11.
And on Thursday in China, the monthly activity indicators are released covering retail sales, production and investment. China is currently transitioning, shifting from production-led growth to consumption-led growth, so it is worth dissecting all the data together to get a sense of what is happening.