It’s hard to know what more remarkable – the Wanderers’ win in front of an antagonistic crowd at King Saud stadium or the raw ebullience stock traders displayed as we saw the end of October and the US Fed’s QE program.
Indeed October was one of the most amazing months for market volatility.
Having lost 9% at one stage during the month, the big US markets finished up more that 2% after the Bank of Japan’s out of the box decision Friday to end the month with accelerated quantitative easing. It was enough of a game changer to see markets end the month focussed on the upside for stocks and bonds – not the negatives associated with the end of the Fed’s QE.
Friday’s trade in stocks, bonds, currencies and commodities (gold might be on the way below $1,000 an ounce) sets up a huge week for traders both here at home in Australia and across the globe. The first week is always a busy week of data and announcements which culminates in non-farm payrolls on Friday night in the US.
The week kicks off with a raft of important manufacturing PMI’s in Australia, China, Korea, Taiwan, India, France, Italy, Germany, the UK and the US. Australia also gets TD inflation and building permits.
On Tuesday Melbourne is out for the Cup and most of Australia will want to be focussed on Flemington. But if you’re a trader you’ll be watching retails sales at 11.30am AEDT and the RBA at 2.30pm AEDT. No one really expects the RBA to do anything but an easing would be a great filip to the economy and really get the Aussie down, BoJ-style.
Our now annual guesstimate of the likely winner of the Cup will be out Tuesday morning using a little statistics, the form guide, the track conditions and a little bit of history.
Wednesday is fairly quiet with the AiG services index out in Australia but that means services PMIs are out around the world. While these tend to carry less influence or immediate market reactions, the reality is that the big developed markets are consumer markets so these bear watching.
Thursday is huge for Australian traders as well with the release of the lately volatile (but still hugely important) ABS employment series. Westpac has gone so far as to not make a forecast. That is huge and means the markets, or at least the Aussie dollar could do anything after the release. Factory orders in Germany are out that night and the BoE and ECB have really important interest rate decisions. Will the ECB finally do something to back rhetoric with action on the QE front?
Friday we get the RBA’s quarterly Statement on Monetary Policy which, although backward looking, will give a strong look into what the RBA really things about activity in Australia. In Europe German trade and industrial production is important and then the US non-farm payrolls will be released.
On the corporate side we get Westpac full-year results on Monday, a trading update from the CBA and CSR half-year results on Wednesday, and the Fairfax and Boral AGMs on Thursday.
In politics Canberra isn’t sitting following last week’s dramatic week which included the government bypassing the parliament to introduce its fuel indexation measures and the passage of the climate change Direct Action plan after a deal with Clive Palmer. There’s still a lot of Budget measures waiting to clear the house including the education reforms and the GP co-payment, and despite all the controversy over these measures it wouldn’t be a bad bet that they’ll be dealt with by the end of the year.
And as if that’s not enough to tire you out the Wallabies are playing Wales on Saturday at Millennium Stadium in Cardiff. If you went to bed with 7 minutes to go against the Ba-Bas you will have thought Michael Cheika was a genius – but the final score line tells us he has plenty of work to do.
Regardless, go Wallabies.
As always here is Westpac’s excellent summary of all the key economic data and events over the next week. Have a good one.