THE WEEK AHEAD

The coming seven days will give us a rounder picture of Australia's economic health, and may lend further support to the Reserve Bank of Australia's decision to lift the cash rate by 25 basis points to four per cent. The central bank is keeping firmly to the line that Australia's economic recovery is on track and should only become increasingly robust.

Local data

Figures from the Australian Bureau of Statistics (ABS) will shed some light on how the local economy is faring in the second half of fiscal 2010, following a better-than-expected performance by Australian companies during February's interim reporting season.

On Wednesday, housing finance for January is due out, and the market consensus is wide-ranging. While CommSec economists see a bullish four per cent lift in lending, AMP forecasts are for a more modest rise of 1.5 per cent. Overall, signs point to a continued housing rebound, as home prices head north and demand remains firm.

Consumer sentiment data for March, also due on Wednesday, will shed some light on the impact of the RBA's three consecutive interest rate rises towards the end of last year.

And finally, labour force data for February is due on Thursday. The consensus is for a modest rise in jobs of 15,000 to 20,000 following several months of strong gains.

Corporate

February's interim reporting season has come to a close, and many major Australian companies are taking a breather after releasing their half-year, or in some cases full-year, profit results.

Trailing the pack, however, is Myer Holdings, which will report its first-half results on Thursday. While the retailer's shares have failed to trade above their $4.10 issue price since listing in November, Myer remains optimistic on its growth outlook, with earnings before interest and tax (EBIT) for the first half of fiscal 2010 forecast to rise by more than 10 per cent, compared to the same period last year.

Based on EBIT of $161 million for H1 2009, this would bring Myer's first-half earnings to at least $177.2 million. Myer has also said that following a solid performance in the first six months, it remains confident of delivering full-year EBIT of $261 million.

Meanwhile, Fairfax Media chief executive Brian McCarthy is scheduled to deliver a talk for the Trans Tasman Business Council's (TTBC) boardroom series in Sydney on Friday.

International

In the United States, a spate of economic data should provide more detail about the country's fledgling recovery. On Wednesday, the US Treasury is due to release its monthly statement for February, which the market will look to for direction on US fiscal policy. Economists have forecast a deficit of about $US53 billion ($A58.80 billion) – an improvement on December's record $US91.9 billion deficit, but a slight rise on the $US42.6 billion deficit for January.

The health of American back pockets should also be reflected in Friday's retail sales figures for February. The market is tipping an improvement of 0.2 per cent, based on some residual momentum in spending following the Christmas/January holiday period.

Michigan consumer sentiment is, however, expected to edge down to 73.4 points in March, from 73.6 in the previous month. This useful consumer confidence index is published monthly by the University of Michigan, and is based on about 500 telephone interviews.

Lastly, January's US business inventories are expected to pick up by 0.3 per cent, reversing a 0.2 per cent slip in the previous month.

Taking stock

Next Wednesday, RBA assistant governor Philip Lowe will deliver a speech to the Urban Development Institute of Australia (UDIA) National Congress. Speakers at this forum, which runs from March 8 to 10, include former Prime Minister Paul Keating and General Peter Cosgrove, and discussions will revolve around the future of development, planning and infrastructure in Australia.

Mr Lowe will speak on 'future directions in finance', and will discuss the prospects for the Australian economy over the year ahead. Mr Lowe, who was formerly the central bank's head of financial stability, has been consistently bullish in his outlook for the country's economy in recent months. The RBA expects Australia to post economic growth of 3.25 per cent to 3.5 per cent throughout this year and the next, up from an estimated two per cent in 2009.