This week’s data calendar in Australia is chock full of important releases which will inform the current debate on the health of the economy, and the likely state of the Government’s finances in the year ahead.
While the employment rate for March on Thursday is notionally the headline Australian economic release for the week, it’s the NAB Business survey on Tuesday I see as the most important. That’s because the NAB survey is so deep and rich in what it tells us both about the performance, plans and expectations of the businesses surveyed, and also how the actions of their customers are feeding back into the economy.
I’ll be watching the headlines for business confidence and conditions closely but the responses to questions about trading, profitability, and employment, along with the other sub-indices, are what really makes this survey the most important release in the economy each month.
Wednesday sees the release of the Westpac consumer sentiment index for April. Given the size of consumption as a percentage of the Australian economy and the role consumers play in driving that consumption this survey is Westpac’s ying to the NAB’s yang in terms of what you need to know about the Australian economy.
Last month’s print of 99.5 was neutral, which in the current economic environment is not too bad. So traders, economists and the RBA will be be watching closely to see if the recent downturn in the ANZ’s weekly consumer confidence survey is mirrored in Westpac’s monthly release.
Turning to Thursday’s employment data and it’s worth noting that this is both the bright and dark spots of the Australian economy. More Australians are working than ever before. But because jobs aren’t rising as much or as fast as the population the unemployment rate of 6.3% is just below the recent 12 year high of 6.4%.
The market is looking for an increase of 15,000 and an unemployment rate of 6.3%.
On the political front, Parliament is still in recess before it resumes for the Budget. So far we haven’t had many specific leaks other than the Treasurer’s admission last week that the big fall in iron ore was going to cause problems for the budget, although it does look like there’ll be some form of “Google tax” to claw more revenue out of multinationals in Australia, and there are also potentially highly controversial changes to superannuation taxes in the wings.
Offshore, Chinese trade on Monday is going to be a big number. Traders will be looking closely at exports as an indicator of overall Chinese growth. UK CPI and US PPI on Tuesday are crucial to ongoing questions about when the BoE and Fed will begin their tightening programs. But for the US, retail sales on Tuesday will probably the key release for the week. The question that traders, economists and policy makers want to know is what is really going on in the US economy, and whether the strong recovery we’ve been seeing is losing momentum.
The Fed has continued to signal it wants to hike this year but for 3 months now the data has been undershooting expectations. If retail sales miss the 1% increase expected for March expectations of a Fed delay into the final quarter of 2015, perhaps even until 2016 will gain traction.
A range of major US companies also report results this week, including JP Morgan, General Electric and Netflix. Profits across the S&P500 are expected to have declined 2.9% from a year ago.
Chinese Q1 GDP on Wednesday is going to be huge. The market is expecting a print of 7% annualised. Wednesday night the ECB policy decision is out but we already know they are pursuing their QE money drop so no market moving impact is expected.
CPI on Friday night in the US rounds out the week. The market is looking at inflation remaining fairly subdued.
Now, here’s Westpac’s excellent calendar of all the data and events for the next week.