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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, January 21, 2019

Howd’y USA

In US economic data, industrial production rose by 0.3% in December (forecast +0.2%) to be up 4% on the year. Manufacturing production rose 1.1% in December. Consumer sentiment fell from 98.3 to 90.7 in January (forecast (97.0). 

US share markets rose solidly on reports of an easing of trade tensions between the US and China. There were broad-based gains with industrials doing best. But shares of Netflix fell by 4% after the steaming company revealed lower-than-expected earnings in the quarter. At the close of trade, the Dow Jones index was higher by 336 points, or 1.4%. The S&P500 index was up by 1.3%. The Nasdaq index was higher by 73 points or 1.0%. Over the week, the Dow Jones rose by 3%, the S&P 500 rose by 2.9% and the Nasdaq rose by 2.7%.

US treasuries were weaker on Friday (yields higher)  on Friday. Equities were favoured over safe-haven assets like gold and government bonds. And production rose more than expected in December, while consumer sentiment fell. US 2-year yields rose 5 points to 2.62% and US 10-year yields rose 4 points to 2.79%. Over the week, US 2-year yields rose by 7 points and US 10-year yields rose by 9 points.

Major currencies were weaker against the US dollar in US and European trade compared with the Asia close. The Euro fell from near US$1.1410 to US$1.1350 and was near US$1.1370 in late US trade. The Aussie dollar fell from near US72 cents to around US71.60 cents and was near US71.65 cents in late US trade. And the Japanese yen eased from 109.30 yen per US dollar to JPY109.87 and was near JPY109.76 in late US trade. 

Global oil prices posted solid gains on Friday. OPEC released details of its plans to wind back production. And there were further signs of a thawing in the US-China trade dispute. Also there was a 21 rig decline in the number of oil rigs in operation in the US in the latest week, hitting 8-month lows. Brent crude rose by US$1.52 or 2.5% to US$62.70 a barrel and the US Nymex price rose by US$1.73 or 0.5% to US$53.80 a barrel. Over the week Brent rose by 3.7% and Nymex rose by 4.3%.

Bonjour, Europe

European share markets rose strongly on Friday. There was a report that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports.  Also there was a Bloomberg report that said China has offered to ramp up imports from the US. Trade-sensitive stocks and sectors did best. The pan-European STOXX600 index rose by 1.8%. The UK FTSE lifted by 2% while the German Dax index lifted 2.6%.

Top of the morning, London

Base metal prices were all higher on the London Metal Exchange with lead up the most (2.2%) while tin only rose only 0.2%. Over the week zinc rose 3.7% and nickel rose 3.1% while lead was flat. The gold futures price fell by US$9.70 an ounce or 0.8% to $1,282.60 an ounce. The spot gold price was trading near US$1,281 an ounce in late US trade.  Over the week gold fell by US$6.90 or 0.5%. Iron ore rose by US$1.20 or 1.6% to US$75.95 a tonne. Over the week iron ore rose by US$1.25 or 1.7%.

In London trade, shares of Rio Tinto rose by 0.7% and BHP rose by 1.8%. 

G’day, Australia!

The CBA Business Sales Indicator is released with lending finance. Chinese economic growth figures are released. The IMF releases economic growth forecasts. US markets are closed for Martin Luther King Jr day.

Have a great day, Australia.

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Aussie jobs data in focus

Friday, January 18, 2019

On Monday      

The week kicks off  when Commonwealth Bank releases its measure on economy-wide sales for December. In addition, the Australian Bureau of Statistics (ABS) issues the final edition of Lending Finance. The report covers not just home loans, but also personal, business and lease loan commitments. The new report to be released in February will combine the detailed Housing Finance publication with Lending Finance.

On Tuesday

ANZ and Roy Morgan release the weekly consumer confidence data. Consumers remain remarkably upbeat, no doubt reflecting the strength of job markets as well as lower petrol prices. 

On Wednesday 

The Department of Jobs and Small Business will release the Skilled Vacancies data for December – a key leading index on the job market. Vacancies have flattened out at a healthy level.

On Thursday 

The ABS releases the December jobs report. The job market is in great shape. In November, 37,100 jobs were created with the jobless rate at 5.1%. In addition, a record proportion of Australians are in the workforce with the trend participation rate at record highs. In December, we expect that jobs lifted by 20,000 with the jobless rate at 5%. Also on Thursday, CBA releases the “flash” survey results purchasing managers in manufacturing and services.

Overseas: Chinese economic growth data in focus

Chinese economic growth and activity data are amongst the highlights in the coming week.

In the US, the economic release schedule is subject to change – a victim of the government shutdown. A bevy of indicators were to be released in the coming week but are now delayed

The week begins on Monday in China with economic growth data for the December quarter. In addition, the final estimates for 2018 are issued for retail sales, industrial production and investment. The Chinese economy likely grew by 6.5% over 2018 (6.4% in the December quarter), hitting official targets. But growth of 6.0-6.5% is more likely in 2019.

In addition, Chinese retail sales is tipped to have grown at an 8.2% annual pace in December with production up 5.3% and investment up 6%.

The International Monetary Fund (IMF) releases new economic forecasts on Monday. The data is likely to show a modest downgrade to growth expectations in 2019, currently estimated at 3.7%. However it’s likely that IMF economists will factor in more Chinese economic stimulus and some resolution to the US-China trade dispute.

On Tuesday in the US, data on existing home sales is released. Economists tip a 0.6% fall in December sales after a 1.9% lift the previous month. Sales stand at 3-month highs. Also the usual weekly data on chain store sales is released on Tuesday.

On Wednesday the influential Richmond Federal Reserve manufacturing index is expected to be released with the House Price index and weekly data on mortgage applications. Over the last seven months US house prices have been rising 0.2-0.4% per month.

In the US on Thursday the weekly data on new claims for unemployment insurance is released together with the leading index and the Kansas Federal Reserve manufacturing index. The leading index rose by a modest 0.2% in November after a 0.3% decline in October and 0.6% increase in September. Also on Thursday in the US the Markit ‘flash’ services and manufacturing indexes are issued. And similar ‘flash’ surveys are issued in France, Germany, Eurozone and Japan.

Friday in the US

So far, no indicators are set down for release. Previously, data on durable goods orders and new home sales were scheduled to be issued.

US earnings season

The US profit-reporting (earnings) season gets into full swing in the coming week. S&P 500 companies are expected to report a 14.3% rise in fourth-quarter earnings, lower than the 20.1%  growth forecast in October, according to IBES data from Refinitiv. So far, the earnings season is progressing well with share markets supported by better-than-expected results from global investment banks.

Amongst companies reporting:

Tuesday: IBM; Johnson & Johnson, Haliburton.

Wednesday: Procter & Gamble; Ford Motor.

Thursday: American Airlines; E*Trade; Intel; ResMed.

Friday: Colgate-Palmolive.

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Good morning, Australia

Monday, January 14, 2019

Howd’y USA

In US economic data, consumer prices fell 0.1% as expected in December to be up 1.9% over the year. Core prices (excluding food and energy) rose 0.2% as expected in the month to be up 2.2% over the year.

US share markets ended flat on Friday as investors squared positions ahead of the start of earnings (profit-reporting) season.  Shares in General Motors rose 7.05% after delivering a strong earnings forecast for 2019. Shares in Netflix rose 4% with Reuters citing "analysts' optimistic forecasts for subscriber growth". The energy sector fell in response to a lower oil price. The Dow Jones fell by 6 points or less than 0.1%, after trading in a range of almost 200 points. The S&P500 index was down less than 1 point. The Nasdaq index was lower by 15 points or 0.2%. Over the week the Dow rose by 2.4%, the S&P 500 rose by 2.5% and the Nasdaq rose by 3.5%.

US treasuries were firmer on Friday (yields lower) in response to benign inflation data and end-week position squaring. The UK Parliament vote on Brexit is held on Tuesday. US 2-year yields fell by 2 points to 2.54% and US 10-year yields fell by 3 points to 2.70%. Over the week US 2-year yields rose by 6 points and US 10-year yields rose by 4 points. 

Major currencies were generally weaker against the US dollar in US and European trade compared with the Asia close. The Euro eased from US$1.1535 to US$1.1455 and was near US$1.1465 in late US trade. The Aussie dollar eased from US72.35 cents to US71.85 cents and was near US72.20 cents in late US trade. And the Japanese yen eased from 108.15 yen per US dollar to JPY108.56 and was near the weakest levels in late US trade.

In the US, Citigroup releases earnings results.  

Bonjour, Europe

European share markets ended mixed on Friday. The pan-European STOXX600 index rose by 0.1% but the UK FTSE fell by 0.4% and the German Dax index lost 0.3%. UK home builders rose in response to a broker upgrade. But energy stocks fell in response to lower oil prices. In London trade, shares of Rio Tinto fell by 0.4% with shares in BHP lower by 0.3%.

Top of the morning, London

Global oil prices fell by 1.9% on Friday, snapping a 9-day winning streak. Investors took profits after solid gains over the past fortnight. The number of oil rigs in operation in the US fell by 4 to 873 last week. Brent crude fell by US$1.20 or 2% to US$60.48 a barrel and the US Nymex price fell by US$1.00 or 1.9% to US$51.59 a barrel. Over the week Brent rose by 6% and Nymex rose by 3.3%. 

Base metal prices rose by up to 2% on the London Metal Exchange with nickel up the most. But aluminium fell by 1.5% while copper rose only 0.2%. Over the week metals were mixed. Aluminium fell 3% and zinc fell 0.5% but tin rose 4.1% and nickel rose by 3.4%. 

The gold futures price rose by US$2.10 an ounce or 0.2% to $1,289.50 an ounce. The spot gold price was trading near US$1,287 an ounce in late US tradeOver the week gold rose by US$3.70 or 0.3%. Iron ore rose by US5 cents or 0.1% to US$74.70 a tonne. Over the week, iron ore rose by US$1.25 or 1.7%. 

G’day Australia

Credit & debit card lending data is released. In China, trade and money supply data is released.

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Good morning, Australia

Friday, January 11, 2019

Howd’y USA

In a wide-ranging question and answer session, the US Federal Reserve chair, Jerome Powell, reiterated that monetary policy can remain patient given benign inflation data. Powell says there is no evidence of a broader economic slowdown in the published data. In US economic data, new claims for unemployment insurance fell by 17,000 to 216,000 in the latest week (forecast 225,000).

US share markets traded in and out of positive territory over Thursday's session. Investors dissected weak earnings results from a number of retailers as well as the latest comments from the Federal Reserve chair. With an hour of trade to go the Dow Jones was higher by 15 points or 0.1% after trading in a 277 point range. The S&P500 index was up by 0.1%. The Nasdaq index was up by 5 points or 0.1%.

US treasuries were flat on Thursday. US equities moved in and out of positive territory while economic data was better-than-expected. US Treasury sold $16 billion in 30-year bonds. US 2-year yields were flat at 2.56% and US 10-year yields were flat near 2.73%. 

Major currencies were generally weaker against the US dollar in US and European trade compared with the Asia close. The Euro eased from US$1.1560 to US$1.1485 and was US$1.1500 in late US trade. The Aussie dollar broadly held between US71.70 cents and US 72 cents and was near US71.85 cents in late US trade. And the Japanese yen eased from 107.75 yen per US dollar to JPY108.45 and was near the weakest levels in late US trade.

In the US, the Consumer Price Index is scheduled.   

Bonjour, Europe

European share markets rose again on Thursday on continued optimism about US-China trade talks. But autos was the weakest sector, down 0.3% while UK retailers were softer on sales updates. The pan-European STOXX600 index rose by 0.3% after spending most of the session in negative territory. The UK FTSE was up by 0.5% and German Dax index up by 0.3%. In London trade, shares of Rio Tinto fell by 0.6% with shares in BHP lower by 0.7%.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange. Zinc and copper fell by up to 1.5% while other metals rose by up to 0.6%.

The gold futures price fell by US$4.60 an ounce or 0.4% to $1,287.40 an ounce. The spot gold price was trading near US$1,287 an ounce in late US trade. Iron ore rose by US15 cents or 0.2% to US$74.65 a tonne. 

Global oil prices rose modestly on Thursday after gains of near 5% in the previous session. Investors await signs of progress on US-China trade talks. But soft Chinese inflation data also weighed on investor sentiment. Brent crude rose by US24 cents or 0.4% to US$61.68 a barrel and the US Nymex price rose by US23 cents or 0.4% to US$52.59 a barrel.

G’day Australia

In Australia, retail trade data is released.

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Good morning, Australia

Wednesday, January 09, 2019

Howd’y USA

In US economic data, the NFIB Business Optimism index eased from 104.8 to 104.6 in December (forecast 103.6). According to the JOLTS survey, job openings eased from 7.131 million to 6.888m in November (forecast 7.063m). Chain store sales in the past week were up 8.9% on a year ago, down from the 9.3% annual growth in the prior week.

US share markets rose again on Tuesday on optimism about US- China trade talks. US President Donald Trump wrote on Twitter that “Talks with China are going very well!”. Shares in Boeing rose 3.3% after it reported that it had delivered a record 806 aircraft in 2018. With an hour of trade to go the Dow Jones was higher by 235 points or 1.0% after being up as much as 333 points in early trade. The S&P500 index was up by 0.8%. The Nasdaq index was up by 65 points or 1.0%.

US treasuries fell again on Tuesday (yields higher) with equities and commodities favoured over bonds on hopes for progress at the US-China trade talks. US Treasury sold $38 billion in three-year notes on Tuesday and will sell $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday. US 2- year yields rose by 6 points to 2.58% and US 10-year yields rose by 3 points to 2.71%.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro held between US$1.1420 and US$1.1470 and was near US$1.1440 in late US trade. The Aussie dollar held between US71.15 cents and US 71.45 cents and was near US71.40 cents in late US trade. And the Japanese yen held between 104.42 yen per US dollar and JPY109.08 and was near JPY108.65 in late US trade.

Global oil prices rose by around 2.5% on Tuesday. US-China trade talks continue to encourage investors about the outlook for global growth and thus oil demand. Brent crude rose by US$1.39 or 2.4% to US$58.72 a barrel and the US Nymex price rose by US$1.26 or 2.6% to US$49.78 a barrel.

Bonjour, Europe

European share markets rose on Tuesday. Investors remain hopeful of progress in US-China trade talks. Retail stocks rose 2.1%. Shares in France's Carrefour rose 2.7% after Bank of America Merrill Lynch upgraded its rating on the stock. But shares in UK supermarket chain Morrisons fell 3.2% after sales fell short of forecasts. The pan-European STOXX600 index rose by 0.9% with the UK FTSE up by 0.7%. The German Dax index was up by 0.5% despite industrial production falling for a third month in November. In London trade, shares of Rio Tinto rose by 0.8% but shares in BHP fell by 0.3%.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange. Zinc, copper and aluminium fell by up to 1.7% while other metals rose by up to 0.8%.

The gold futures price fell by US$4.00 an ounce or 0.3% to $1,285.90 an ounce. The spot gold price was trading near US$1,285 an ounce in late US trade. Iron ore was unchanged at US$74.95 a tonne.

G’day Australia

In Australia, data on job vacancies and building approvals are released. In the US, minutes of the last Federal Reserve meeting are released with weekly mortgage applications. US President Trump addresses the nation at 1pm Sydney time. US-China trade talks continue.

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Good morning, Australia!

Friday, December 21, 2018

Howd’y, USA

The leading index rose 0.2% in November (forecasting +0.1%). The Philadelphia Federal Reserve manufacturing index fell from +12.9 to +9.4 in December (forecast +15). And new claims for unemployment insurance rose 8,000 in the past week to 214,000 (forecast 216,000). Durable goods orders data is released, with revised economic growth, personal income/spending, consumer confidence and the Kansas Fed manufacturing index. There is a scheduled CNBC TV interview with Federal Reserve president John Williams.  

US share markets fell as investors continued to digest the Federal Reserve decision. Worries about a possible Government shutdown also weighed on sentiment. Weak sales data and earnings forecasts dragged shares lower including Accenture, Carnival Corp, Walgreens Boots Alliance and Conagra Brands. With an hour of trade to go, the Dow Jones was down 350 points (or 1.5%) after being down 679 points. The S&P500 index was down by 1.1%. The Nasdaq index lost 84 points or 1.3%.

US treasuries fell on Thursday (yields higher) as investors mull the latest Federal Reserve rates decision. US 2-year yields rose 3 points to 2.67% and US 10-year yields rose by 1 point to 2.79%. 

Major currencies were firmer against the US dollar in US and European trade compared with the Asia close. The Euro rose from lows near US$1.1380 to US$1.1485 and was near US$1.1470 in late US trade. The Aussie rose from US70.85 cents to US71.45 cents and was near US71.25 cents in late US trade. And the Japanese yen lifted from 112.25 yen per US dollar to JPY110.95 and was near JPY111.15 in late US trade.

Global oil prices fell 5% on Thursday. Weaker equities markets are weighing on sentiment in commodity markets. Also US crude inventories at Cushing, Oklahoma, the delivery point for US crude futures, rose by 1.85 million barrels in the week through Dec. 18, traders said, citing data from market intelligence firm Genscape. Brent crude fell by US$2.89 or 5.0% to US$54.35 a barrel and the US Nymex price fell by US$2.29 or 4.8% to US$45.88 a barrel.

Bonjour, Europe

European share markets fell on Thursday. Declines were broad-based. Some analysts cite disappointment at the US Federal Reserve rates decision. Shares in Airbus fell 4.4% after the Le Monde newspaper reported the United States had opened an investigation into allegations of corruption. The pan-European STOXX600 index fell by 1.5% with the UK FTSE down by 0.8% and the German Dax index was lower by 1.4%. 

Top of the morning, London

In London trade, shares of Rio Tinto fell by 2.0% with BHP down by 2.6%. Base metal prices were mixed on the London Metal Exchange. Metals fell by up to 0.8% with aluminium down the most but lead rose by 0.5% and tin rose by 0.3%.

The gold futures price rose by US$11.50 an ounce or 0.9% to a near 6-month high of $1,267.90 an ounce. The spot gold price was trading near US$1,262 an ounce in late US trade. Iron ore rose by US$1.75 or 2.5% to US$72.15 a tonne. 

G’day, Australia

The detailed labour force data for November is released.

Have a great day, Australia!

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Good morning, Australia!

Monday, December 17, 2018

Howd’y USA

Economic data, both headline retail sales and sales excluding autos rose by 0.2% in November, in line with forecasts. Industrial production rose by 0.6% in November (forecast +0.3%). Production is up 3.9% on the year. US share markets ended lower on Friday. Investors responded to weak Chinese economic data. Investors await the Federal Reserve rate decision on Thursday. There are also fears of a US government shutdown on December 21. And investors watched developments on the UK Brexit crisis. At the close of trade the Dow Jones was down by 497 points or 2.0%. The S&P500 index fell by 1.9%. The Nasdaq index lost 160 points or 2.3%. Over the week the Dow lost 1.2%, the S&P 500 fell 1.3% and the Nasdaq lost 0.8%. US treasury bond prices rose on Friday (yields lower) as investors favoured safe-haven assets. However US economic data met or exceeded forecasts. US 2-year yields fell by 2 points to 2.74% and US 10-year yields fell by 2 points to 2.89%. Over the week US 2-year yields rose by 3 points and US 10-year yields rose by 4.5 points.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro fell from near US$1.1360 to US$1.1270 and was near US$1.1305 in late US trade. The Aussie fell from near US71.90 cents to around US71.50 cents and was near US71.80 cents in late US trade. And the Japanese yen rose from 113.67 yen per US dollar to JPY113.20 and was near JPY113.35 in late US trade.

Global oil prices fell on Friday with weak Chinese economic data raising concerns about the strength of future global oil demand. Weak equities markets weighed on commodity sentiment. But according to Baker Hughes the number of oil rigs in operation in the US fell by four in the latest week to 873. Brent crude fell by US$1.17 (or 1.9%) to US$60.28 a barrel and the US Nymex price fell by US$1.38 or 2.6% to US$51.20 a barrel.

Zǎoshang hǎo, China

In the year to November, Chinese retail sales rose 8.1%, production rose 5.4% and investment rose 5.9%. 

Bonjour, Europe

European share markets fell on Friday. Investors focussed on weak European and Chinese economic data. Also European leaders told the UK Prime Minister that they wouldn't be renegotiating the Brexit deal. The autos sector lost 1.3%. The pan-European STOXX600 index fell by 0.6% with the UK FTSE and the German Dax index both falling by 0.5%. In London trade, shares of Rio Tinto fell by 1.6% with BHP down by 0.9%.

Base metal prices were generally lower on the London Metal Exchange on Friday. Zinc fell 2.4% and other metals fell up to 0.5% but nickel rose by 2.1%. Over the week, tin rose 1.9% and nickel rose 1.5% but zinc fell 4.2% and aluminium fell 2.2%.  

The gold futures price fell by US$6 an ounce on Friday or 0.5% to $1,241.40 an ounce. The spot gold price was trading near US$1,238 an ounce in late US tradeOver the week gold fell by US$11.20 or 0.9%. Iron ore rose by US$1.70 on Friday or 2.5% to US$69.90 a tonne. Over the week iron ore rose by US$2.95 or 4.4%. 

G’day, Australia!

Overseas arrivals and departures data is released with the Mid-Year Economic and Fiscal Outlook report.

Have a great day, Australia!

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Wind down to Christmas begins…

Friday, December 14, 2018

On Monday. the Australian Bureau of Statistics (ABS) releases the Overseas Arrivals & Departures publication – timely considering so many people jet off for holidays at this time of year.

The Federal Government will also hand down its Mid-Year Review on Monday

On Tuesday, the Reserve Bank releases the minutes of the last Board meeting. No new insights are expected. And on the same day, ANZ and Roy Morgan release the weekly consumer confidence data.

On Thursday, the ABS releases the June quarter population estimates together with the November labour market data. Annual population growth probably held near 1.5% – one of the fastest rates across advanced nations. Meanwhile probably near 20,000 jobs were created in November, leaving the jobless rate near a 6-year low of 5%. Also on ThursdayCommonwealth Bank releases its Business Sales Indicator.

 On Friday, the ABS releases yet more jobs data – this time the more detailed estimates for November, including the figures on employment by industry.

Looking further out, the Reserve Bank releases the Private Sector Credit data on New Year’s EveOn Wednesday January 2, CoreLogic will release December data on home prices. The CBA manufacturing purchasing manager’s index is released also on January 2 with the services gauge on January 4.

Overseas: Fed rate decision in focus

There is no shortage of economic data and events in the US and China over the next three weeks.

In China, the highlights areHouse prices (December 15); Industrial profits (December 27); the ‘official’ manufacturing and services purchasing managers indexes (December 31); Caixin manufacturing (January 2); Caixin services (January 4).

 In the US on Monday (December 17), the influential Empire State manufacturing index is released with the NAHB housing market index and capital flows data.

On Tuesday, the housing starts and building permits data are issued with weekly chain store sale

The US Federal Reserve Open Market Committee meet over Tuesday and Wednesday with the decision announced on Thursday morning Sydney time at 6am. While a rate hike is likely, it is by no means assured. More Federal Reserve officials have indicated that the federal funds rate is near “neutral”.

On Thursday, data on existing home sales is issued with the weekly data on unemployment insurance claims.

And then there is Super Friday’It appears that all data issuers want to clear the decks before Christmas and the end of the year. Included on Friday December 21: Economic growth (GDP); Personal income & spending; Durable goods orders; Chicago Federal Reserve national activity index; Philadelphia Federal Reserve manufacturing index; S&P/Case Shiller home price index; Consumer sentiment; Leading index; and the Kansas Federal Reserve manufacturing index.

The following week, on Thursday December 27, FHFA home prices, new home sales, consumer confidence and the Richmond Federal Reserve index are released with weekly data on unemployment insurance claims. While on Friday, the goods trade balance is issued with the Chicago purchasing manager’s index.

The New Year datafest begins on Thursday January 3, with the ISM manufacturing index released with construction spending, ADP employment, Challenger job cuts and new vehicle sales. The US economy continues to perform well. At 59.3, the ISM index is well above the 50 reading that separates expansion from contraction. In November new vehicle sales were the second highest recorded in the past year.

And on Friday January 4, the ISM services index is released with the non-farm payrolls (employment) data, ADP employment and Challenger job cuts. Just like the manufacturing gauge, the services index indicates solid activity given the reading stands at 60.7. The jobless rate remains at a 49-year low of 3.7% but annual wage growth is still relatively modest at 3.1%.

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Good morning, Australia!

Monday, December 10, 2018

Hello, world!

Global oil prices rose on Friday after OPEC oil ministers and Russia agreed to cut output by 1.2 million barrels per day (bpd). OPEC will curb output by 800,000 bpd from January while non-OPEC allies contribute an additional 400,000 bpd of cuts. The number of oil rigs in operation in the US fell by 10 in the latest week, the most in two years. Brent crude rose by US$1.61 or 2.7% to US$61.67 a barrel and the US Nymex price rose by US$1.12 or 2.2% to US$52.61 a barrel. Over the week Brent rose by US$2.96 or 5% with Nymex up US$1.68 or 3.3%.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro rose from US$1.1360 to US$1.1420 and was near US$1.1375 in late US trade. The Aussie dollar eased from near US72.40 cents to around US71.95 cents and was near US72.00 cents in late US trade (currently US71.8c). And the Japanese yen lifted from 112.93 yen per US dollar to JPY112.54 and was near JPY112.70 in late US trade.

Howd’y, USA!

In US economic data, non-farm payrolls (employment) rose by 155,000 in November after a downwardly-revised gain of 237,000 in October (forecast +205,000). The jobless rate was steady at 3.7%. Average earnings rose by 0.2% (forecast +0.3%) with annual growth unchanged as forecast at 3.1%. Consumer sentiment steady at 97.5 in December (forecast 97).  US share markets recorded broad-based declines on Friday with key indexes down 2-3%. Concerns over the US-China trade dispute continue to linger. The Dow Jones lost 559 points or 2.2%. The S&P500 index was lower by 2.3% and the Nasdaq index was lower by 219 points or 3.1%. Over the week the Dow lost 4.5%, the S&P 500 fell by 4.6% and the Nasdaq lost 4.9%. US treasury bond prices rose on Friday (yields lower) after jobs data fell short of forecasts. Investors favoured bonds over equities on US-China trade concerns. US 2-year yields fell by 5 points to 2.72% and US 10-year yields fell by 4 points to 2.86%. Over the week, US 2-year yields fell by 11.5 points and US 10-year yields fell by 12.5 points.

Zǎoshang hǎo, Asia

China November data: consumer prices +2.2% over year (forecast +2.4%). Producer prices +2.7% as expected. Exports +5.4% over year (forecast +10%). Imports +3% (forecast +14.5%). Trade surplus US$44.7bn (forecast +US$34bn) 

Bonjour, Europe

European share markets were generally higher on Friday. The oil & gas index rose 2.2% but the trade-sensitive autos sector fell 0.2%  The pan-European STOXX600 index rose by 0.6% and the UK FTSE rose by 1.1% but the German Dax index lost 0.2%. In London trade, shares of Rio Tinto up 2% with BHP up by 2.5%.

Top of the morning, London

Base metal prices were higher by up to 1.1% on the London Metal Exchange on Friday with copper up the most. But zinc fell by 1.0%. Over the week metals were mixed with tin up 3.4% and nickel down by 2.6%. The gold futures price rose by US$9.00 an ounce or 0.1% to $1,252.60 an ounce. The spot gold price was trading near US$1,248 an ounce in late US tradeOn the week gold rose by US$26.60 or 2.2%. Iron ore rose by US85 cents or 1.3% to US$66.95 a tonne. On the week iron ore rose US$1.50 or 2.3%.

G’day, Australia

In Australia, housing finance data is released. Reserve Bank assistant Governor Christopher Kent delivers a speech. In the US, the JOLTS job openings series is released.

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Good morning, Australia!

Monday, December 03, 2018

China and the US have agreed to halt additional tariffs in the hope of securing a broad trade agreement within 90 days. The White House said China will buy a "very substantial" amount of agricultural, energy, industrial and other products. US and China will begin negotiations on issues such as technology transfer, services and agriculture. If the two countries are unable to reach an agreement in 90 days, the 10% tariffs will be raised to 25%. 

How’dy USA!

In US economic data, the Chicago purchasing managers index rose from 58.4 to 66.4 in November (forecast 58).

US share markets ended firmer on Friday. Investors awaited the result of US-China trade talks. The energy sector eased but airlines rose in response to weaker oil prices. Shares in General Electric fell 5.5% on reports of a federal investigation. The Dow Jones rose by almost 200 points or 0.8%. The S&P500 index rose by 0.8% and the Nasdaq index gained 57.5 points or 0.8%. Over the week the Dow rose 5.1%, S&P 500 rose by 4.8% and the Nasdaq rose 5.6% - the biggest weekly gain in over seven years. Over the month the Dow rose 1.7%, S&P 500 rose 1.8% and Nasdaq gained 0.3%.   

US treasury bond prices were higher again on Friday (yields lower). Investors favoured equities over safe-haven bonds and gold. US 2-year yields fell by 2 points to 2.80% and US 10-year yields fell by 4 points to near 2.99%. Over the week US 2-year yields fell by 4.5 points and US 10-year yields fell by 6 points.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro eased from US$1.1395 to US$1.1305 and was near US$1.1315 in late US trade. The Aussie dollar held between US72.85 cents and US73.15 cents and was near US73.18 cents in late US trade. And the Japanese yen eased from 113.35 yen per US dollar to near JPY113.65 and was near JPY113.45 in late US trade. This morning, the Euro is US$1.1355; Aussie at US73.75 cents and Japanese yen at JPY113.46.

Global oil prices fell by over 1% on Friday, largely reversing Thursday's gains. Brent crude fell by US80 cents or 1.3% to US$58.71 a barrel and the US Nymex price fell by US52 cents or 1.0% to US$50.93 a barrel. Over the week Brent lost 0.2% and Nymex rose 1.0%.

Bonjour, Europe

European share markets were weaker on Friday ahead of the US-China meeting on trade issues. The pan-European STOXX600 index fell by 0.2%. The German Dax index lost 0.4% and the UK FTSE index fell by 0.8%. In London, trade, shares of Rio Tinto fell by 1.7% and shares in BHP were down by 1.9%.

Top of the morning, London

Base metal prices were firmer by up to 3.4% on the London Metal Exchange on Friday, with zinc up the most but tin lost 0.7% and copper lost 0.3%. Over the week metals were mixed with nickel up 2.6% and tin lost 2.2%. The gold futures price fell by US$4.40 an ounce or 0.4% to $1,226 an ounce. The spot gold price was trading near US$1,222 an ounce in late US trade. Over the week gold rose by US$2.80 or 0.2%. Iron ore fell by US20 cents or 0.3% to US$65.45 a tonne. Over the week, iron ore fell by US$3.45 or 5%.

G’day, Oz

In Australia, data on home prices is released with the purchasing manager indexes, job ads and Business Indicators publication. In the US, data on vehicle sales and construction spending are released with the ISM manufacturing survey.

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