Call us on 1300 794 893

The Experts

Australia: Jobs data dominates

Craig James
Friday, July 12, 2019

Bookmark and Share

In the coming week there is little in the way of top-tier economic data. But the all-important June employment report will hog the headlines towards the end of the week. Before this, the minutes of the Reserve Bank’s July 2 Board meeting - where interest rates were cut for a second successive month - are issued on Tuesday.

On Tuesday

The week kicks off on Tuesday when the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Consumers have been given a ‘shot in the arm’ by income tax and mortgage rate cuts, boosting their potential purchasing power.

Also, on Tuesday, the Reserve Bank Board’s July 2 monetary policy meeting minutes will be closely observed. At that meeting the cash rate was cut by 25 basis points to a record low 1%. It was the first back-to-back rate cut since mid2012. But Reserve Bank Governor Philip Lowe has since signalled that he may sit pat in the near term, choosing to “closely monitor how things evolve over the coming months”. While developments in the labour market remain the Bank’s key focus, the June quarter update on inflation looms large at month-end.

On Wednesday

On Wednesday, Westpac and the Melbourne Institute releases the Leading Index for June. The May reading of -0.1% implies a continuation of sub-trend economic growth into the second half of 2019.

On Thursday

On Thursday the NAB releases the June quarter survey of business confidence and conditions. Also, on Thursday, the employment report for June is issued. Both the unemployment and underemployment rates have ticked up in recent months. And leading indicators of jobs growth have weakened. The participation rate has hit record highs.

The Reserve Bank has cited spare capacity in the labour market for successive quarter per cent rate cuts in June and July. Commonwealth Bank economists have forecast 5,000 jobs to have been created in June with the unemployment rate stuck at 5.2% for a third consecutive month – above the Reserve Bank’s 4.5% “full employment” target.

Overseas: China economic growth data in focus

Chinese economic growth and activity data are amongst the highlights in the coming week. In the US, retail spending and the Federal Reserve’s Beige Book will be keenly observed ahead of the next interest rate decision.

On Monday

The week begins on Monday in China with economic growth data for the June quarter. The economy grew at a 6.4% annual pace in the December quarter, the slowest growth rate since March 2009. And growth is expected to slow even further to around 6.3% after the hike in US tariffs on US$200 billion worth of Chinese goods and services in May weighed heavily on China’s factories and the export sector. In addition, Chinese retail sales is tipped to have grown at an 8.5% annual pace in June with production up 5.3% and investment up 5.6%. Home prices are tipped to grow by around 11% over the year.

On Monday in the US, the influential New York Federal Reserve Empire State Manufacturing Index is issued.

On Tuesday

On Tuesday, the regular weekly reading on US chain store sales is due, along with retail sales, trade prices, industrial production, capacity utilisation, business inventories and homebuilder sentiment data. Retail spending is tipped to lift by 0.2% - the fourth successive monthly gain - after a solid 0.5% jump in May.

On Wednesday

On Wednesday, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. The June readings on housing starts and building permits are issued. The US Federal Reserve’s Beige Book will be scrutinised for an expected improvement in the economic outlook across districts after trade tensions between the US and China receded at the G20 Summit in Osaka, Japan. But modest growth is expected later this year.

On Thursday

On Thursday, the weekly figures on new claims for US unemployment insurance are issued, along with factory data from the Philadelphia Federal Reserve. The Conference Board’s Leading Index is also issued. The index was unchanged in May – the first month without an increase since January.  

On Friday

On Friday, the University of Michigan releases its preliminary July estimate of consumer sentiment.

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 2.5% fall in second quarter earnings growth according to Bloomberg data.

On Monday

Amongst companies reporting on Monday: Charles Schwab, iHealthcare, JB Hunt Transport, QBioMed.

On Tuesday

Tuesday: BlackRock, Domino’s Pizza, Goldman Sachs, Johnson & Johnson, JPMorgan Chase, Morgan Stanley, Netflix, United Airlines, UnitedHealth, Wells Fargo.

On Wednesday

Wednesday: Alcoa, Bank of America, IBM, Kaiser Aluminium, Steel Dynamics, Texas Instruments, United Rentals.

On Thursday

Thursday: AMEX, Bank of New York Mellon, Microsoft, PayPal, Philip Morris, Skyworks Solutions, Snap-on, Travelers.

On Friday

Friday: Cleveland-Cliffs, E*Trade, eBay, Honeywell, Schlumberger, State Street.

Published: Friday, July 12, 2019


New on Switzer

blog comments powered by Disqus
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300