Call us on 1300 794 893

The Experts

James
Craig James
Economy Expert
+ About Craig James
About Craig James

Craig James is CommSec’s Chief Economist.

On leaving school Craig James joined the (then) Rural Bank, whilst undertaking university studies. He received his Bachelor of Commerce (Economics) at University of NSW in 1984 and then a Master of Commerce (Economics) at the same university in 1988.

He remained at the Rural Bank, which became the State Bank over time and then Colonial, working in branches, Corporate, Planning and Economic Research.

He became chief economist of Colonial Group in September 1987, before becoming chief economist at CommSec in August 2000 with the Commonwealth takeover of Colonial.

In 2002 Craig had a sea-change, joining the Australian Financial Review. He had always wanted to pursue a role in journalism and enjoyed the role as an economic commentator and analysts, finding that he could pursue a journalistic-type role as well as doing more electronic media work at CommSec and rejoined the group in 2003.

On taking the reigns of chief economist at Colonial, Craig endeavoured to style their research in a “user-friendly” way – something that set their research apart and still does today. The approach has been successful in their media work and in promoting Colonial, and then CommSec, to the general public. CommSec is the most quoted economic group in the mainstream media.

CommSec economic reports are a bit different in that they devise tools such as the ‘Mums and Dads’ share index and the iPod index, and undertake research on the weather and demographic changes to show how they affect the economy.

Craig currently does around 2-3 regular TV crosses a day, ad hoc radio and newspaper interviews and writes regular commentaries as well as presenting to staff, clients and external organisations.

Outside work, Craig's main interests are athletics (cross country in winter), weight training, reading widely across a range of newspapers, magazines and electronic media, and trying to keep up with the children.

Good morning, Australia

Monday, September 16, 2019

How’dy USA

In US economic data, retail sales rose 0.4% in August (forecast +0.2%). Excluding autos, sales were flat (forecast +0.1%). Export prices fell 0.6% in August (forecast -0.2%) and import prices fell 0.5% (forecast -0.4%). Consumer sentiment rose from 89.8 to 92.0 in September (forecast 90.9).

US share markets were mixed on Friday. Materials rose 1.1% but real estate fell 1.3%. Shares in Apple lost 1.9% after a major broker cut its price target on the stock. The Dow Jones rose by 37 points or 0.1% after trading in an 84 point range. The S&P500 index fell 0.1%; the Nasdaq lost 18 points or 0.2%. Over the week the Dow rose 1.6%, the S&P 500 rose 0.95% and the Nasdaq gained 0.9%.

US treasuries were weaker again on Friday (yields higher). Investors perceived an easing of US-China trade tensions. And retail sales rose by more than expected in August. US 2-year yields rose by 8 points to 1.802% and US 10-year yields rose by 11 points to 1.899 per cent. Over the week, US 2-year yields rose by 27 points and US 10-year yields rose by 35 points. It was the largest weekly gain for 10-year yields in 6 years and the biggest weekly gain in 2- year yields in a decade.

Bonjour Europe

European share markets posted moderate gains on Friday. The US and China made trade concessions to each other. Banks rose by 3%, miners rose 2.7%, autos rose 1.3% but the defensive food and beverages sector fell 2.1%. The pan-European STOXX600 index rose by 0.3%, the German Dax lifted 0.5% and UK FTSE gained 0.3%. In London trade, shares of Rio Tinto rose by 2.2% and BHP lifted by 1.8%.

Hello World!

Major currencies held in tight ranges against the US dollar in US and European trade compared with the end of Asian trade. The Euro held between US$1.1060 and US$1.1110 and was around US$1.1070 in late US trade. The Aussie dollar held between US68.65 cents and US68.90c and was near US68.75c in late US trade. The Japanese yen broadly held between 107.90 yen per US dollar and JPY108.15 and was near JPY108.05 in late US trade.

Global oil prices fell by around 0.4% on Friday. Concerns about the softness of global economic growth balanced optimism on US-China trade talks. The Brent crude price fell by US16 cents or 0.3% to US$60.22 a barrel. And the US Nymex price fell by US24 cents or 0.4% to US$54.85 a barrel. Over the week Brent fell by 2.1% and Nymex fell by 3.0%.

Base metal prices were generally firmer on the London Metal Exchange on Friday. Copper rose 2.5% but tin lost 3.9% and nickel lost 1.9%. Over the week metals rose up to 2.4% with copper doing best and zinc rose 2.2%. But tin lost 5.4%.

The gold futures price fell by US$7.90 or 0.5% to US$1,499.50 an ounce. The spot gold price was trading near US$1,488 an ounce in late US trade. Over the week gold fell by US$16 an ounce or 1.1%. Iron ore rose by US25 cents or 0.3% to US$99.10 a tonne. Over the week iron ore rose by US$11 a tonne or 12.5%.

Iran-backed Houthi rebels in Yemen have claimed responsibility for a drone attack on Saudi Arabia's Abqaiq plant. About half of the country's oil output has been affected.

G’day Australia

In Australia, no major data is expected. In China, retail sales, production and investment data is issued. In the US the Empire State manufacturing index is released.

| More

 

Australia: Employment data in the spotlight

Friday, September 13, 2019

On Tuesday

The week kicks-off on Tuesday when the Australian Bureau of Statistics (ABS) issues data on home prices for the June quarter in its publication Residential Property Price Indexes. The figures are dated – early September data from CoreLogic is already being issued. But the publication includes the latest estimates on the number of homes in each state and territory.

On Tuesday weekly consumer confidence data is issued by ANZ and Roy Morgan. Sentiment is just below the long-run average levels. Worries about the economic outlook dominate although people are generally happy about the state of their finances. Also, on Tuesday the Reserve Bank issues minutes from the Board meeting held on September 3. Little guidance is expected on a future rate cut. But each month Board members discuss a topic of interest and that may provide fresh information for investors to contemplate.

On Thursday

On Thursday, the ABS released the August Labour Force publication. Not only is data provided on employment and unemployment, but there are also estimates on hours worked and under-utilised labour. The Reserve Bank will assess all these measures – not just the unemployment rate – when deciding if another rate cut is required. Commonwealth Bank Group economists expect that 20,000 jobs were created in August with the jobless rate unchanged at 5.2%. The Reserve Bank is expected to stay on the interest rate sidelines if the results are in line with forecasts. The jobless rate has been steady in recent months as more people entering the job market have picked up the new jobs on offer.

Also, on Thursday, the ABS releases population estimates for the March quarter. Australia’s population has grown by 1.6% over the past years, near the average growth pace over the past decade. Population is growing fastest in Victoria although Tasmania’s population is growing at the fastest rate in 28 years. And finally, on Thursday, the Reserve Bank issues its quarterly Bulletin – a publication that contains topical reports on the economy and financial markets.

Overseas: US Federal Reserve to decide on a rate cut

There are two stand-out events in the coming week. China releases monthly activity data and the US Federal Reserve holds its policy meeting over Tuesday and Wednesday.

On Monday

The week begins on Monday in China when the National Bureau of Statistics issues August data on retail spending, investment and industrial production. The data is important as it will show what impact that the trade dispute with the US is having on the Chinese economy.

On Monday in the US, the September Empire State manufacturing index is produced by the New York Federal Reserve, the index is regarded as an influential regional gauge on the economy.

On Tuesday

Over Tuesday and Wednesday, the US Federal Reserve policy-making committee meets – the FOMC. Financial markets are tipping another rate cut of 25 basis points (or a quarter of a percent) in order to sustain the record economic expansion.

On Tuesday in the US, the regular weekly reading on US chain store sales is due together with industrial production data, capital flows figure and the housing market sentiment index from the National Association of Home Builders.

On Wednesday

On Wednesday in the US, the weekly reading on mortgage applications is issued as well as the building permits and housing starts data for August. In July, building permits grew by a sizeable 8.4% – suggesting stronger building activity lies ahead. But the number of homes where work started in August fell by 4% to a 1.19 million annual rate.

On Thursday

On Thursday, the weekly figures on jobless claims are issued in the US, along with data on existing home sales and the leading index. In July sales of existing homes hit a 5-month high (second highest reading over the past year), up 2.5% on the previous month. The National Association of Realtors estimated the median house price at $280,800 in July, compared to $269,300 a year earlier. The leading index in the US is calculated by the Conference Board. After two modest 0.1% declines in May and June, the leading index lifted by 0.5% in July. There are ten indicators that make up the leading index including new orders, building permits and share prices. The Conference Board says the latest results “suggest the US economy will continue to expand in the second half of 2019, it is likely to do so at a moderate pace.”

Also, on Thursday the Philadelphia Federal Reserve manufacturing index is released. Just like the Empire State index, the Philly Fed index is seen as an influential gauge of the broader economy. On Thursday in the UK, the Bank of England policymaking committee meets. In New Zealand, economic growth data is released.

| More

 

Good morning, Australia

Monday, September 09, 2019

How’dy USA

In US economic data, non-farm payrolls (employment) rose by 130,000 in August (forecast +160,000). The unemployment rate was steady at 3.7% as expected. Average hourly earnings rose by 0.4% (forecast +0.3%) to be up 3.2% on the year (forecast +3.0%). US Federal Reserve chair, Jerome Powell, said that the Federal Reserve will "act as appropriate" to sustain the US economic expansion. The Fed chair also downplayed the prospect of a global or US recession.

US share markets were mixed on Friday, as investors digested the latest news. The Dow Jones rose by 69 points or 0.3%. The S&P500 index rose by 0.1%, but the Nasdaq lost almost 14 points or 0.2%. Over the week the Dow rose 1.5% with S&P 500 and Nasdaq both up 1.8%. US treasury yields were flat on Friday. US 2-year yields were near 1.54% and US 10-year yields were near 1.56%. Over the week US 2-year yields rose by 3.5 points with 10-year yields up by 5.5 points.

Bonjour Europe

European share markets rose on Friday with Chinese stimulus offsetting softer US jobs data and German industrial orders. The People's Bank of China said it would cut the reserve requirement ratio by 50 basis points (bps) for all banks, with an additional cut of 100 bps for some qualified banks. The pan-European STOXX600 index rose by 0.3% and the German Dax gained 0.5% with the UK FTSE up by 0.2%. In London trade, shares of Rio Tinto rose by 0.4% and BHP rose by 0.5%.

Hello World!

Major currencies were mixed against the US dollar in US and European trade compared with the end of Asian trade. The Euro held broadly between US$1.1020 and US$1.1055 and was near US$1.1020 in late US trade. The Aussie dollar rose from US68.15 cents to US68.60 cents, ending US trade near US68.35 cents. The Japanese yen lifted from 107.08 yen per US dollar to JPY106.62 and was near JPY106.80 in late US trade.

Global oil prices rose by up to 1% on Friday. Prices had eased after the US job data, but lifted after comments from the US Federal Reserve chair. Supporting prices was data showing the number of oil rigs operating in the US fell by 4 to 738 in the past week. The Brent crude price rose by US59 cents or 1.0% to US$61.54 a barrel. And the US Nymex price rose by US22 cents or 0.4% to US$56.52 a barrel. Over the week Brent rose by 1.8% and Nymex rose by 2.6%.

Base metal prices were mixed on the London Metals Exchange on Friday. Zinc, copper and tin fell up to 0.9% and other metals rose up to 1.4% with lead up the most. Over the week metals rose by between 2.3% (aluminium) and 6.5% (tin). But nickel eased by 1.4%.

The gold futures price fell by US$10.00 or 0.7% to US$1,515.50 an ounce. The spot gold price was trading near US$1,507 an ounce in late US trade. Over the week gold fell by US$4.35 an ounce or 0.3%. Iron ore fell by US$2.10 or 2.3% to US$88.10 a tonne. Over the week iron ore rose by US$3.70 or 4.4%.

G’day Australia

Australian lending and US consumer credit data are issued.

| More

 

Australia: Business and consumer confidence in focus

Friday, September 06, 2019

In the coming week there will be more insights into the economic environment in terms of business conditions and consumer sentiment. Home lending data will be scrutinised for a continued stabilisation in housing finance commitments. And the deceleration in Chinese tourist arrivals is expected to continue due to slowing Chinese economic growth and retail spending.

On Monday

The week kicks-off on Monday when the Australian Bureau of Statistics (ABS) issues new lending data for July. Property market conditions and activity have improved, boosting hopes of a continued stabilisation in housing finance approvals. But the all important spring selling season is crucial to the demand outlook.

On Tuesday

On Tuesday weekly consumer confidence data is issued by ANZ and Roy Morgan. Sentiment is around long-run average levels with volatility in share markets, Aussie dollar weakness and elevated petrol prices counterbalanced by lower mortgage rates, tax cuts and a bottoming in home prices. Also, on Tuesday NAB’s August business survey is released. Australia’s business sector lost momentum prior to the federal election> Forward looking indicators – particularly trading conditions and profitability – don’t point to an improvement in the near term. Global trade frictions are also weighing on sentiment, but lower interest rates and tax offsets are expected to eventually feed through to firms.

On Wednesday

On Wednesday, monthly consumer confidence data is issued by Westpac and Melbourne Institute. Sentiment lifted by 3.6% in August – the biggest lift in six months – propelled higher by a pick-up in consumer views on home purchases. Sentiment towards buying a dwelling is the most positive in 5½ years. Also, on Wednesday, tourism data is released by the ABS. In June, a record 11.2 million annual trips were made by Aussies - 5.4 million more than 10 years ago. But the annual growth rate for Chinese tourists travelling to Australia was just above 9-year lows at 1.4%.

On Thursday 

On Thursday, the Reserve Bank issues updated credit and debit card lending data for the month of July.  

Overseas: Inflation data issued in the US and China 

In the US, the two stand-out economic data releases in the coming week are consumer prices (inflation) and retail spending. In China, the focus is on international trade and inflation data.

On Sunday

The week begins on Sunday in China when the National Bureau of Statistics issues international trade data for August. Exports unexpectedly rose by 3.3% in the year to July, with goods shipped to the European Union and South-East Asian nations lifting, offsetting a decline in US exports due to rising tariffs.

On Monday

On Monday in the US, July consumer credit (or lending) data is also issued. Consumer credit card debt rose by US$14.6 billion in June – the weakest amount in three months – perhaps due to greater economic uncertainty.

On Tuesday

On Tuesday in China, consumer and producer prices data are scheduled. Consumer prices are lifting due to elevated fruit and meat prices. But the drop-in producer prices signalled that China’s industrial sector had slipped back into deflation due to lower automobile and raw material prices.

On Tuesday in the US, the regular weekly reading on US chain store sales is due together with the JOLTS series of job openings report. The number of job vacancies (7.3 million) remains above the number of unemployed (6.1 million) in the US due to a skills shortage and tight labour market.

Also, on Tuesday, investor attention will be on the reaction of the US small business sector (NFIB survey) to the latest escalation in China trade tensions. The details of the survey will be scrutinised, especially with respect to new business investment intentions and capital spending plans amid rising political uncertainty.  

On Wednesday

On Wednesday in the US, the weekly reading on mortgage applications is issued as well as producer prices and wholesale inventories data. Core producer prices unexpectedly declined by 0.1% in July – the first fall in two years – as costs declined for guestroom rentals, loan services, physician care and truck freight transportation. On Wednesday, Chinese data on new vehicle sales is expected.

On Thursday 

On Thursday, the weekly figures on jobless claims are issued in the US, along with consumer prices and the monthly budget statement. US core inflation rose by 0.3% to 2.2% from a year earlier in July, above economists’ expectations. Rising shelter, medical, clothing and used car prices are challenging US policymakers’ view that a return to its 2% inflation target would take longer than previously anticipated. Rising tariffs on goods could limit the case for additional US Federal Reserve rate cuts, despite weakening business investment.

On Friday

On Friday, the all-important US monthly retail sales report is issued. In July, consumer spending lifted by 0.7% – the most in four months – as Amazon Prime Day sales boosted online sales. Job and wage gains have buoyed consumer sentiment, despite concerns about the levying of import duties on consumer goods prior to Thanksgiving and Christmas.

Also, on Friday, the University of Michigan’s preliminary consumer confidence survey for August is issued. The survey was at 7-month lows in July, contrasting with near-cycle highs for the Conference Board measure. US trade prices are also released. Import prices rose by 0.2% in July after falling by the most in seven months in June with US dollar strength keeping a lid on import costs.

On Friday in China, money supply data may be released. 

| More

 

Good morning, Australia

Monday, September 02, 2019

How’dy USA

In US economic data, personal income rose 0.1% in July (survey +0.3%) with spending up 0.6% (survey: +0.5%). The core personal consumption deflator (inflation measure) rose 0.2% as expected to be up 1.6% on the year. Consumer sentiment fell from 98.4 to 89.8 in August (survey 92.4) - the lowest since December 2012. The Chicago purchasing managers index rose from 44.4 to 50.4 in August (survey 47.5).

US share markets were mixed in thin trade on Friday. Economic data was also mixed. Traders squared positions at the end of the week and the month ahead of the long weekend. The Dow Jones rose by 41 points or 0.2%. The S&P500 index rose by 0.1% and the Nasdaq lost 10.5 points or 0.1%. Over the week the Dow rose 3%, the S&P 500 lifted 2.8% and the Nasdaq rose by 2.7%.

US treasuries were firmer on Friday (yields lower) as traders squared positions ahead of the long weekend. US 2-year yields fell by 2 points to near 1.51% and US 10-year yields fell by 2 points to near 1.50%. Over the week US 2-year yields fell by 2 points and US 10-year yields fell by 3 points.

Bonjour Europe

European share markets lifted on Friday after China and the US indicated willingness to proceed on trade talks. Commodity dependent stocks rose 2.5% and auto stocks rose 1%. The pan European STOXX600 index rose by 0.7%, the German Dax lifted 0.9% and the UK FTSE rose by 0.3%. In London trade, shares of Rio Tinto rose by 2.6% and BHP rose by 2.5%.

Hello World!

In Chinese economic data, the manufacturing purchasing managers index fell from 49.7 to 49.5 in August (survey 49.7) while the services PMI rose from 53.7 to 53.8 (survey 53.7).

Major currencies were mixed against the US dollar in US and European trade compared with the end of Asian trade. The Euro fell from highs near US$1.1050 to around US$1.0960 and was near US$1.0993 in late US trade. The Aussie dollar rose from US67.08 cents to US67.40 cents, ending US trade near US67.13 cents. The Japanese yen rose from 106.54 yen per US dollar to JPY105.97 in late US trade.

Global oil prices fell on Friday. Traders watched the progress of Hurricane Dorian towards Florida and the potential to affect output of offshore US producers. The Brent crude price fell by US65 cents or 1.1% to US$60.43 a barrel. And the US Nymex price fell by US$1.61 or 2.8% to US$55.10 a barrel.

Base metal prices were mixed on the London Metal Exchange on Friday. Zinc, lead and copper fell by up to 2.8%. However, nickel rose 8.8% with tin up 3.5% and aluminium rose 0.1%. Over the week nickel rose by 14.5% with tin and copper also higher. Other metals fell up to 2.8% with lead down the most.

The gold futures price fell by US$7.50 or 0.5% to US$1,529.40 an ounce. The spot gold price was trading near US$1,520 an ounce in late US trade. Over the week gold fell by US$8.20 an ounce or 0.5%. Iron ore rose by US$4.40 or 5.4% to US$85.85 a tonne. Over the week iron ore fell by US$3.10 or 3.5%.

G’day Australia

In Australia, the Business Indicators publication is released with CBA manufacturing purchasing managers index (PMI) job ads, CoreLogic home value index and the monthly inflation gauge. In China the Caixin manufacturing PMI is released. US financial markets are closed for Labor Day.

| More

 

Australia: the ‘Spring Tsunami’ of economic information

Friday, August 30, 2019

On Monday

The week kicks on Monday with a raft of economic indicators. Leading the way is the Business Indicators publication from the Australian Bureau of Statistics (ABS). Data included is company profits, stocks, wages and sales. The CoreLogic home value index will also get plenty of attention on Monday with home prices rising again in August.

Also, on Monday figures on job advertisements are released with the monthly inflation gauge and surveys of manufacturing purchasing managers conducted by both Commonwealth Bank and Australian Industry Group. Both surveys indicate that modest expansion of the manufacturing sector is proceeding. 

On Tuesday

On Tuesday the Reserve Bank Board holds its monthly meeting. No change in interest rate settings is expected. The Reserve Bank Governor has indicated that the Board is gathering information to determine whether another rate cut is warranted.

In economic data on Tuesday, the broader gauge of Australia’s trade or external position is released in the form of the current account figures. The current account has been in deficit since 1975. But that could all change on Tuesday with a small surplus forecast by a number of analysts. Also, on Tuesday, the June quarter government finance statistics are released – a key input to the quarterly economic growth figures.

On Wednesday

Those economic growth estimates for the June quarter are issued as part of the “National Accounts” publication to be released on Wednesday. While there is still some information to be received (such as the government data) the economy probably grew by around 0.5% in the June quarter to be up 1.8% over the year. Also, on Wednesday, the Federal Chamber of Automotive Industries (FCAI) is expected to release the August data on new car sales. The anecdotal evidence suggests that a larger number of budding home buyers are purchasing late model used cars in preference to buying new cars.

On Thursday

On Thursday, the ABS issues the publication “International trade in Goods and Services”. In June the trade surplus hit a record high of $8 billion with exports to China at record highs.

Overseas: US jobs data grabs the spotlight

As in Australia, a barrage of new economic information is set for release in both the US and China over the week. The monthly US jobs data (non-farm payrolls) is of most interest, but investors will have to wait until Friday to assess this new information.

On Monday

The week begins on Monday in China when the private sector media company, Caixin, releases the August survey of purchasing managers in the manufacturing sector. Earlier (on Saturday August 31) the “official” National Bureau of Statistics purchasing manager indexes on manufacturing and services are issued.

After the Labor Day holiday in the US on Monday, the flow of economic data begins on Tuesday. First cab off the rank is data on construction spending together with surveys of purchasing managers in the manufacturing sector from the Institute of Supply Management (ISM) and Markit.

On Tuesday

Also, on Tuesday is data on US new car sales and the IPD/TIPP economic optimism gauge.

On Wednesday

On Wednesday in China, Caixin releases the results of a survey of purchasing managers in the services sector.

On Wednesday in the US, one of the weekly economic highlights is released. The Federal Reserve releases the Beige Book – a qualitative summary of economic conditions across Federal Reserve district banks. In economic data, the July trade figures (exports and imports) are released on Wednesday, together with weekly readings on chain store retail sales and mortgage applications as well as the regional ISM New York index. The monthly trade deficit sits near US$55 billion.

On Thursday

On Thursday, the weekly figures on jobless claims are issued in the US, along with the ADP survey of private sector payrolls and factory orders. Results of the surveys of purchasing managers in the services sector will be published by ISM and Markit. The ISM index was at 53.7 in July with Markit at 53.0. Any reading above 50 represents expansion of the services sector.

On Friday

On Friday, the all-important US monthly Employment Situation survey publication is released containing data on non-farm payrolls or employment. The US jobs market is solid, with the good outcomes driving wage increases, and in turn, consumer spending. Analysts expect that jobs grew by 160,000 in August with the jobless rate near 49-year lows at 3.6-3.7%. Average hourly earnings may have lifted by around 3.0% over the year, still with a healthy gap above inflation.

 

 

| More

 

Good morning, Australia

Monday, August 26, 2019

How’dy USA

In US economic data, new home sales fell by 12.8% in July to a 635,000-annual rate (forecast 649,000). US Federal Reserve chief Jerome Powell said that the US economy is in a "favourable place" and the Fed will "act as appropriate to sustain the expansion". Powell also said that the US faces "significant risks".

US share markets slumped on news of fresh Chinese tariffs on US goods. The Dow Jones fell by 623 points or 2.4% while the S&P500 fell by 2.6% and the Nasdaq lost almost 240 points or 3.0%. Over the week the Dow lost 1% with the S&P 500 down 1.4% and Nasdaq lost 1.8%.

US treasuries were firmer on Friday (yields lower) as traders bought safe-haven assets on news of escalation of the China-US trade war. US 2-year yields fell by 8 points to near 1.529% and US 10-year yields fell by 8 points to near 1.527%. Over the week US 2- year yields fell 1.3 points and 10-year yields rose by 5 points.

Bonjour Europe

European share markets fell on Friday in response to the latest news on the China-US trade war. Autos fell 2.1% with mining and technology down 1.1%. The pan-European STOXX600 index fell by 0.8%, the German Dax lost 1.2% and the UK FTSE fell by 0.5%. In London trade, shares of Rio Tinto fell by 0.5% and BHP lost 1.2%.

Hello World!

Global oil prices fell by up to 2.1% on Friday after the US-China trade war escalated. But supporting prices was news that the number of oil rigs in operation in the US was at the lowest since January 2018. Brent crude price fell by US58 cents or 1.0% to US$59.34 a barrel. And the US Nymex price fell by US$1.18 or 2.1% to US$54.17 a barrel. Over the week Brent rose by 1.2% but Nymex fell by 1.3%.

Base metal prices were mixed on the London Metal Exchange on Friday. Tin fell 1.8% and copper fell 0.8% but other metals rose by up to 0.6% with lead up the most. Over the week tin fell 4.2% with nickel down 3.1%. But zinc rose 0.2% and lead rose 1.5%..

The gold futures price rose by US$29.10 an ounce or 1.9% to US$1,537.60 an ounce. The spot gold price was trading near US$1,526 an ounce in late US trade. Over the week gold rose by US$14.00 an ounce or 0.9%. Iron ore rose by US$3.95 or 4.6% to US$88.95 a tonne. Over the week iron ore fell US$3.85 or 4.1%.

G’day Australia

In Australia, no major economic data is released. In the US, data on durable goods orders and is issued with the Chicago Federal Reserve National Activity index. There is a Bank Holiday in the UK.

| More

 

Australia: Business investment and construction activity data in focus

Friday, August 23, 2019

On Monday

On Monday, investors will be able to respond to a speech by Reserve Governor Lowe (delivered Sunday 2.25am AEST).

On Tuesday

On Tuesday the weekly series of consumer confidence will be released by Roy Morgan and ANZ. Tax refunds, low mortgage rates and a bottoming of the property market are supporting consumer sentiment. Also, on Tuesday, the July Commonwealth Bank (CBA) Household Spending Intentions gauge is released. June readings showed weakness persists in the retail and motor vehicle sectors. But other sectors appear to be bottoming out with home buying intentions improving. The Reserve Bank Deputy Governor Guy Debelle is scheduled to speak at the Economic Society of Australia (ACT) lunch in Canberra at 12pm AEST.

On Wednesday

On Wednesday, the Australian Bureau of Statistics (ABS) provides an update on construction activity. In the year to March, construction work done was at record highs in New South Wales, South Australia and Tasmania. But CBA Group economists forecast a decline of 1.0% in construction activity in the June quarter.

On Thursday

On Thursday, the ABS issue’s the publication “Private New Capital Expenditure and Expected Expenditure” for the June quarter, including estimates of future investment. The second estimate of spending in 2019/20 was $99.1 billion, up 12.8% on the second estimate for 2018/19 - the strongest increase in 7 years. CBA Group economists expect that new investment (spending on buildings and equipment) was flat in the June quarter.

On Friday

On Friday, the ABS released the July data on building approvals – the consents granted by local councils to build new houses and apartments. Home building is easing in most states and territories. Also, on Friday, the Reserve Bank releases the estimates of private sector credit (effectively, loans outstanding). Annual housing credit growth was at historical lows of 3.5% in June. The Australian Prudential Regulation Authority (APRA) releases estimates on bank deposits, loans and credit card lending for July.

Overseas: US economic growth and Chinese manufacturing activity in focus

As the Northern Hemisphere summer draws to a close, US investors have plenty of data releases to digest, including the second estimate of June quarter economic (GDP) growth. Chinese industrial profits and the ‘official’ manufacturing and services gauges are also scheduled.

On Monday

The week begins on Monday in the US with the release of durable goods orders and business surveys from the Chicago and Dallas Federal Reserve. The strong US dollar, weak demand for exports, slowing global growth, soft Boeing aircraft orders and trade policy uncertainty are all weighing in US business investment.

On Tuesday

On Tuesday, the regular Redbook weekly reading on US chain store sales is released along with home prices, consumer confidence and manufacturing data from the influential Richmond Federal Reserve. On Tuesday in China, industrial profits data is scheduled. Falling corporate profits constrain firm’s capacity to expand production, investment and hiring. Falling producer prices are a headwind to the Chinese economy.

On Wednesday

On Wednesday, weekly mortgage applications figures from the US Mortgage Bankers Association are due.

On Thursday

On Thursday, the weekly figures on jobless claims are issued, along with US GDP growth, pending home sales, trade, wholesale inventories and corporate profits data. The second estimate of June quarter annualised GDP growth is forecast to be weaker at 1.9%, down from 2.1%. Consumer spending remains solid due to low unemployment and robust wages growth, but business investment contracted due to trade policy uncertainty.

On Friday

On Friday, personal income and spending data is issued along with the Chicago purchasing managers index and final consumer confidence reading from the University of Michigan. The personal income data includes pivotal inflation data – the core personal consumption expenditure deflator – the measure tracked by the Federal Reserve. The core PCE deflator may have lifted 0.2% in July to stay 1.6% higher on the year.

On Saturday

On Saturday in China, the National Bureau of Statistics releases the manufacturing and services purchasing manager indexes for August. Factory activity has contracted for five out of seven months so far in 2019 as the trade war with the US bites. That said, the services sectors contribution to GDP growth is over 50%, and non-manufacturing activity continues to expand, supported by tax cuts.

Financial Markets

The Australian corporate reporting season – the time when listed companies report earnings results – enters its final week. While subject to change, major companies expected to report include:

On Monday

On Monday: Fortescue Metals Group and Resolute Mining.

On Tuesday

On Tuesday: Adairs, AUB Group; Caltex Australia; CleanTeQ; Fleetwood; G8 Education; Japara Healthcare; Paladin Energy; Spark Infrastructure; Wesfarmers; Yowie.

On Wednesday

On Wednesday: Accent; Appen; Bega Cheese; Bravura Solutions; Eagle Health; Independence Group; Orocobre; OZ Minerals; Prime Media; Salmat.

On Thursday

On Thursday: Adelaide Brighton, Bellamy’s; Boral; Clinuvel Pharmaceuticals; Metro Mining; Ramsay Health; Regional Express; Village Roadshow; Virgin Australia; Woolworths.

On Friday

On Friday: Austal; Chant West; Freedom Foods; Harvey Norman; Kingsgate; Sandfire Resources; Slater & Gordon.

| More

 

Good morning, Australia

Monday, August 19, 2019

In US data, housing starts fell by 4.0% in July to a 1.191 million annual rate (forecast 1.257m). But building permits rose by 8.4% to a 1.336m annual rate (forecast 1.27m). Consumer sentiment fell from 98.4 to 92.1 in August (forecast 97.2).

US share markets rose on Friday with investors encouraged by hopes of German fiscal stimulus. Shares in chipmaker Nvidia rose 7.3% after its earnings result. Shares in General Electric rose by 9.7% after Chief Executive Officer Larry Culp bought nearly $2 million in shares. So far 459 of the companies in the S&P 500 have posted earnings results. Of those, 73% beat Street estimates, according to Refinitiv data. Second quarter earnings are up 2.9% on the year. The Dow Jones rose by almost 307 points or 1.2% with the S&P500 up by 1.4%, while the Nasdaq gained 129 points or 1.7%. Over the week the Dow lost 1.5%, the S&P 500 index fell 1.0% and the Nasdaq fell by 0.8%.

US treasuries were mixed on Friday as traders squared positions and booked profits at the end of the week. Equities and commodities rose but economic data was mixed. US 2-year yields fell by 2 points to near 1.48% and US 10-year yields rose by 1 point to near 1.54%. Over the week US 2-year yields fell by 15 points and US 10-year yields fell by 9 points.

Bonjour Europe

European share markets rose on Friday. There were reports in Der Spiegel magazine that the German coalition government would be prepared to ditch its balanced budget rule and take on new debt to engage in fiscal stimulus. Banks rose by 2.4%. The pan-European STOXX600 index rose by 1.2%, the German Dax rose by 1.3% and the UK FTSE gained 0.7%. In London trade, shares of Rio Tinto fell by 0.5% and BHP lost 1.0%.

Hello World!

Major currencies were mixed against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from near US$1.1065 to US$1.1105 and was near US$1.1090 in late US trade. The Aussie dollar held between US67.70 cents and US67.95 cents and was near US67.80 cents in late US trade. The Japanese yen eased from near 106.05 yen per US dollar to JPY106.48 and was near JPY106.35 in late US trade.

Global oil prices rose by 0.7% on Friday on expectations of stimulus by global central banks. But OPEC cut its forecasts of global oil demand. And the number of oil rigs in operation in the US rose from 764 to 770 in the past week. The Brent crude price rose by US41 cents or 0.7% to US$58.64 a barrel. And the US Nymex price rose by US40 cents or 0.7% to US$54.87 a barrel. Over the week Brent rose by 0.2% and Nymex rose by 0.7%.

Base metal prices fell by up to 3.4% on the London Metal Exchange on Friday. Tin fell the most while zinc and copper eased up to 0.2%. But aluminium rose by 0.5%. Over the week metals were mixed with nickel, aluminium and zinc higher - nickel rose by 4.6%. Other metals fell with tin down 2.1%.

The gold futures price fell by US$7.60 or 0.5% to US$1,523.60 an ounce. The spot gold price was trading near US$1,514 an ounce in late US trade. Over the week gold rose by US$15.10 or 1.0%. Iron ore rose by US75 cents or 0.8% to US$89.55 a tonne. Over the week iron ore fell by US$5.25 or 5.5%.

G’day Australia

In Australia, no major economic data is expected. In the US, no major economic data is expected.

| More

 

Australia: Reserve Bank Board minutes in focus

Friday, August 16, 2019

A quieter week is in prospect in the coming week on the economic and financial calendar. Featured is the release of minutes of the Reserve Bank Board meeting, held on August 6.

On Tuesday

The weekly series of consumer confidence will be released by Roy Morgan and ANZ. The low value of the Aussie dollar and concern about how low interest rates may fall in Australia are issues for Aussie consumers. Also on Tuesday, the Reserve Bank releases minutes of the Board meeting held on August 6 – the meeting that decided to leave interest rates unchanged at 1.00 per cent. The new economic forecasts likely dominated discussion at the meeting. Looking out over the next 12-18 months, the Reserve Bank tips stronger economic growth, a modest lift in inflation and slightly lower jobless rate than applies currently

On Wednesday

On Wednesday, the Department of Employment, Skills, Small and Family Business releases the Internet Vacancy Index – a measure of available jobs in the economy. In June the IVI fell by 0.6 per cent – the sixth consecutive decline. And the IVI is 6.7 per cent down on a year ago.

On Thursday

On Thursday, the Australian Bureau of Statistics (ABS) releases detailed labour force estimates for July. Each month the ABS releases headline data like employment, unemployment and the participation rate. Then a week later the ABS releases for detailed estimates including demographics. For instance, it is possible to get the number of 60-65 year old Aussie in the job market. The Reserve Bank Governor recently highlighted the increasing participation of senior workers in the job market. Also on Thursday, Commonwealth Bank, in conjunction with Markit, releases August ‘flash’ (or early) estimates on activity in manufacturing and services sectors.

On Sunday

On Sunday August 25 Australian time at 2.25am (August 24 10.25am Wyoming, US), the Reserve Bank Governor is due to deliver a speech

Overseas: US housing activity in focus

Just like in Australia, the US economic and financial calendar is sparsely populated in the coming week.

On Tuesday

The week begins on Tuesday, with the releases of the regular Redbook weekly reading on US chain store sales.

On Wednesday

On Wednesday, the minutes of the last Federal Reserve Open Market Committee (FOMC) meeting are issued. The minutes will provide some guide about the likelihood of future interest rate cuts. Also on Wednesday, weekly mortgage applications figures from the US Mortgage Bankers Association are due with the July figures on existing home sales. In June, home sales fell 1.7 per cent to an annual rate of 5.27 million. According to Trading Economics the median house price went up to an all-time high of $285,700 in June from $278,200 in May and $277,700 a year earlier. Year-on-year, existing home sales dropped 2.2 percent, the 16th straight annual decline in home sales.

On Thursday

On Thursday in the US, the weekly figures on jobless claims are issued, along with the Conference Board leading index and the Kansas Federal Reserve manufacturing gauge. The leading index fell 0.3 per cent in June – the first decline since December 2018. The Conference Board says growth is likely to remain slow in the second half of the year. As such, the leading index supports the decision of the Federal Reserve to trim rates. Also on Thursday, August ‘flash’ (or early) survey estimates of purchasing managers are issued in Japan, the US, France, Germany and the Eurozone. The results provide insights into manufacturing and services sector activity. And beginning on Thursday (through to Saturday) is the annual gathering of central bankers in Jackon Hole Wyoming, US. This year the Economic Symposium is entitled “Challenges for Monetary Policy”. How apt.

On Friday

On Friday, US new home sales data is issued. Sales of new single-family homes rose 7 per cent to a seasonally adjusted annual rate of 646,000 in June – the first rise in two months but still below forecasts. Economists tip another 6 per cent increase in sales in July. While interest rates are low and the job market is strong, analysts say that a shortage of affordable properties is constraining sales.

Financial markets

The reporting season – the time when listed companies report earnings results – moves into top gear in the coming week. While the data is subject to change, companies expected to report on include:

Monday

Altium; BlueScope Steel; GWA; NIB Health; and Lendlease.

Tuesday

BHP; SEEK; Estia Health; Oil Search; Senex Energy; Tassal; Sonic Healthcare; Charter Hall; Monadelphous; Kogan; Seven West Media.

Wednesday

A2 Milk; Crown Resorts; Nearmap; Dominos; Aventus; Iluka; Emeco; Data#3; McMillan Shakespeare; St Barbara; WorleyParsons; Wisetech; Stockland and; Brambles.

Thursday

Bingo; Origin Energy; Alumina; Perpetual; Zip; Medibank; Santos; Qube; Qantas; Flight Centre; ERM Power; Vocus Group; Southern Cross Media; Coca-Cola Amatil; Scentre Group; MyState; Downer EDI; Webjet; Coles Group; South32; Growthpoint Properties.

Friday

Costa Group; Pilbara Minerals; WPP; Mayne Pharma; Coventry; IRESS, Ardent Leisure; Goodman; BMX.

 

 

| More

 

MORE ARTICLES

Good morning, Australia

Australia: Jobs and wages data dominate

Good morning, Australia

Australia: Reserve Bank dominates

Good morning, Australia

Australia: Inflation in focus

Australia: Mid-winter lull

Good morning, Australia

Australia: Jobs data dominates

Good morning, Australia

Australia: Post-election results

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Australia: Interest rates & economic growth

Good morning, Australia

Australia: Business investment and credit growth data in focus

Jobs data: Something for everyone

Good morning, Australia

Australia: Wage and jobs data in focus before Election Day

Good morning, Australia

Good morning, Australia

Australia: Inflation data in focus

Good morning, Australia

Australia: Reserve Bank and jobs data ahead of Easter holidays

Good Morning, Australia

Australia: Reserve Bank and consumer confidence in focus

Good Morning, Australia

Job market in good shape

Good Morning, Australia

Quiet week with focus on ‘second tier’ data

Good morning, Australia

Good morning, Australia!

Good morning, Australia!

Good morning, Australia!

Slowdown in key events next week

Good Morning, Australia

Good Morning, Australia

Thinking about growth

Good Morning, Australia

Good morning, Australia

A mixed bag of data and events next week!

Good morning, Australia

Good morning, Australia!

Good morning, Australia

Good morning, Australia!

Aussie jobs data in focus

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia!

Good morning, Australia!

Wind down to Christmas begins…

Good morning, Australia!

Good morning, Australia!

Summer signposts for investors

Good morning, Australia!

Good morning, Australia!

A good set of numbers

Good morning, Australia!

Spotlight on our job market

Good morning, Australia!

Mate against mate. State against state

Good morning, Australia!

The week kicks off …

Spending is slowing

Days of our lives

Friday I have Monday on my mind

Tassie baby boom & baby boomers working more

Things are looking good

What’s ahead for Oz and the world economy next week?

Investor Signposts: Are wages on the rise?

Investor signposts: RBA dominates the agenda

Investor signposts: Which state will come out on top?

Will consumer and business prices lift?

The week ahead: Money for nothing

The week ahead: All eyes on China

The week ahead: New beginnings

The week ahead: End of Financial Year lull?

The week ahead: Australian arrivals and departures

The week ahead: The US Fed takes centre stage

The week ahead: Winter is here

The week ahead: Heavyweight US economic growth

The week ahead: Consumer confidence and US housing

The week ahead: Wage Price Index and China's activity

The Week Ahead: The Budget and Inflation

The week ahead: Reserve Bank in focus and US Fed meets

The week ahead: Inflation and US economic growth

The week ahead: Can the Aussie labor market continue its record-breaking run?

The week ahead: Economic indicators and inflation data

The week ahead: Aus job market and US inflation

The week ahead: Jobs growth and US Fed expected to lift interest rates

The week ahead: lending data and US inflation

The week ahead: The Reserve Bank, US jobs and Chinese inflation data

The week ahead: Spotlight on the US Fed Reserve Chair

The week ahead: Wages growth and US Federal Reserve

The week ahead: Reporting season week 2




Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300






-->