Call us on 1300 794 893

The Experts

Australia: Inflation data in focus

Craig James
Thursday, April 18, 2019

Bookmark and Share

On Wednesday

The week kicks off on Wednesday when Australian Bureau of Statistics releases the CPI data together with detailed jobs data for March. Also, the weekly consumer sentiment index is issued by ANZ and Roy Morgan. And the Department of Employment releases March data on skilled job vacancies. Furthermore, the latest figures show an easing of skilled job vacancies. But the question is (and this applies also to the ANZ job advertisement series) is whether the vacancies series are picking up the trend to list jobs on LinkedIn and individual company websites rather than job search websites.

But the spotlight on Wednesday, is firmly on the CPI data for the March quarter. The key inflation figures are only released once a quarter, rather than each month as they are in a raft of advanced economies. So, the data takes on special importance – especially as current and prospective inflation guides Reserve Bank policymaking.

The ‘headline’ CPI is tipped to lift by just 0.2% in the March quarter, dragging the annual rate down from 1.8% to 1.5%. A key factor keeping inflation low is petrol – fuel prices fell by around 9% in the March quarter, taking around 0.2 percentage points off the quarterly CPI growth.

In the March quarter there are seasonal increases in education fees, alcohol & tobacco (higher excise tax) and pharmaceutical product prices (changes to the safety net threshold for Pharmaceutical Benefits Scheme and Medicare Benefits Scheme). And there is a seasonal fall in the cost of overseas holiday travel & accommodation.

Also, on Wednesday, the underlying CPI measures are expected to have lifted by around 0.4% in the March quarter with the annual growth rate easing from 1.8% to 1.7%.

On Thursday

Both the Producer Price Indexes (business inflation) and International Trade Price Indexes (export & import prices) publications are released.

Overseas: US housing market in focus

A raft of data covering the US housing market is released in the coming week. Investors will also be focussed on the personal income/spending data on Friday.

On Monday

The week begins on Monday in the US when the Chicago Federal Reserve releases the March reading of the national activity index. The index has fallen in four of the past five months. Also, on Monday in the US, data on existing home sales is released for March. In February, sales soared by 11.8% to an 11-month high so analysts expect some correction in the April results, perhaps down around 6%.

On Tuesday

The regular US weekly data on chain store sales is scheduled along with the monthly data on house prices, new home sales and the influential Richmond Federal Reserve manufacturing index. Also, Tuesday saw the house price data is issued by the Federal Housing Finance Agency. In January, prices rose by 0.6% – the strongest reading in 11 months. And just like existing home sales, new home sales may have slipped in March after a solid 4.9% gain in February.

On Wednesday

The only data of note in the US is the regular weekly reading on new mortgage applications. As would be expected, applications (especially refinancing) fluctuate in line with changes in average fixed 30-year mortgage rates. Applications soared in March as yields fell but have lending has eased in April.

On Thursday

Figures for durable goods orders are released with the Kansas Fed manufacturing index and the usual weekly data on claims for unemployment insurance. Durable or long-lasting goods are those goods expected to last three years or more – goods like cars and aircraft. New orders fell by 1.6% in February but rose 0.1% if transport goods are excluded. Analysts tip a 0.4% lift in March orders.

On Friday

The first (“advance”) estimate of US economic growth for the March quarter is expected. Economic growth slowed from 3.4% to 2.2% in the December quarter. Apart from economic growth, investors will also be focussed on inflation readings – namely the core personal consumption expenditure deflator. This is the inflation measure favoured by Federal Reserve policymakers. Also, on Friday, US data on wholesale inventories is issued with the second (final) reading of consumer sentiment for the month of April. The index on the outlook for consumer finances is at 14-year highs.

Financial markets

On Monday

Haliburton, Kimberley-Clark

On Tuesday

Coca Cola, Harley Davidson, Jet Blue, Lockheed Martin, Procter & Gamble, Texas Instruments, Twitter, Verizon.

On Wednesday

AT&T, Boeing, Caterpillar, Domino’s Pizza, Goodyear, Novartis, Advanced Micro, Facebook, Wynn Resorts, Microsoft, Tesla, Visa. 

On Thursday

3M, American Airlines, Comcast; Nokia, Amazon, Intel, Ford.

On Friday

Chevron, Exxon Mobil, Colgate-Palmolive, Sony.

Published: Thursday, April 18, 2019


New on Switzer

blog comments powered by Disqus
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300