There are a range of important releases due over the coming days, following last week’s relatively quiet end to the 2017 financial year.
The ASX200 closed lower on Friday amid some market volatility late in the week, taking its annual gain for the 2017 financial year to 9.3%:
But futures traders have marked the local index up for Monday morning after global stocks bounced back in Friday trade.
While the ASX200 tailed off in the wake of the federal budget in May, the Aussie dollar continues to outperform. It fell back below Friday highs above US77 cents in North American trade, but remains well supported and will open the week at US76.9 cents.
With no headline data releases last week (both domestically or abroad), markets moves were largely driven by a shift in tone from major central banks.
The central banks of Europe, the UK and Canada all provided indications to markets that a move towards the withdrawal of monetary stimulus and/or a rise in interest rates is now factoring into their forward planning.
Exactly when the tightening of monetary policy begins to be implemented is unclear, but the clear shift in forward guidance from a number of central banks caused ripples of volatility to move through markets last week across multiple asset classes.
The Reserve Bank of Australia is unlikely to follow suit and signal any plans to tighten policy when it makes its next interest rate announcement on Tuesday at 2:30pm AEST.
The RBA is almost certain to keep rates on hold at 1.5%, although its accompanying statement will be scutinised for evidence that the bank is maintaining its recent optimistic stance on the outlook for the Australian economy.
The other key data point on Tuesday is May retail sales at 11:30am AEST. Retail sales in April were unexpectedly strong, although some seasonal factors likely contributed to the result.
Two straight months of good retail data would be good news for the broader economy, given the well-documented headwinds the sector faces from structural changes, competitive threats and low wage growth.
The other headline data release domestically this week is Australia’s international trade balance for May, scheduled for Thursday (11:30am AEST).
Australia’s trade surplus fell in April to the lowest level since October last year due to a sharp fall in exports.
Set out below is a list of the other domestic data releases this week (information provided by Commsec):
US: Key data points start with the ISM Manufacturing Index on Monday night. Wednesday night the US Fed puts out the minutes from its last interest rate announcement, released on a 3-week lag. Thursday night there’s international trade and jobless claims, then on Friday after markets close in Australia the employment report will be released. The consensus forecast is for the US unemployment rate to remain unchanged at 4.3%. There’s Fed speakers throughout the week, starting with St Louis Fed President James Bullard on Monday night at a conference in London.
China: Caixin PMI data will be released this week, with manufacturing PMIs on Monday and services PMIs on Wednesday (both scheduled at 11:45am AEST). On Friday, China releases its foreign exchange reserves as at the end of June.
Japan: Tankan large manufacturing index and Nikkei manufacturing PMI are both on Monday. Nikkei services PMIs are on Wednesday. Friday has the leading economic index for May (a composite index comprised of 12 economic indicators).
Europe: Unemployment rate for May on Monday night. Tuesday there’s the Purchaser’s Price Inflation Index for May, with services and composite PMIs on Wednesday. Also on Wednesday there’s May retail sales data. Thursday there’s retail PMIs and ECB minutes from its monetary policy meeting.
UK: Manufacturing PMI data on Monday, with construction PMIs on Tuesday and composite PMIs on Wednesday. Friday there’s UK house price data, industrial and manufacturing production, and international trade figures.
Canada: Manufacturing PMIs on Tuesday. On Wednesday Canada releases its employment report for June, with analysts forecasting a steady rise given the recent positive indicators in the Canadian economy.
New Zealand: Tuesday there’s the Quarterly Survey of Business Opinion, a more detailed measure of business confidence and activity. Also on Tuesday there’s housing credit for May. On Wednesday there’s house price data and ANZ job advertisements.
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