AUSTRALIAN DIARY: Everything you need to know about the week ahead for markets

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It’s a quieter weak of data ahead following a packed start to the month.

US employment data beat expectations on Friday night, with the economy adding 209,000 jobs against 170,000 forecast.

The unemployment rate ticked higher to 4.4% from 4.3%, but that was due to an increase in labour force participation.

It was a strong result for the US economy and could mark a price floor for the US dollar, which has fallen steadily this year amid political gridlock and a run of weak data points.

The greenback rose against all major currencies, with the US dollar index climbing by 0.7% off its recent lows back to 93.49 — still almost eight points down from its opening value in February 2017 of 101.12.

The Australian dollar weakened to 0.7930 against the USD but performed strongly against most major currencies on Friday night.

The S&P500 traded flat and remains just off its recent highs, but the Dow continued its steady climb and posted its eighth straight record high on Friday.

ASX futures traders have marked the local index up strongly to start the week as earnings season in Australia continues.

Australia

On Tuesday there’s the release of ANZ’s job advertisements data and the NAB business survey for July. Both data points have been tracking positively of late and are seen as useful leading indicators for the future performance of the Australian economy.

On Wednesday it’s housing finance data from the Australian Bureau of Statistics. Analysts will likely focus on the move away from investor lending towards owner-occupier loans, with that trend evident in recent data following the introduction of macro-prudential restrictions in April.

Also on Wednesday there’s the Westpac/Melbourne Institute consumer confidence index. The focus will be on whether the recent strength in employment data is translating through to more upbeat consumer sentiment.

A reading of more than 100 indicates consumer optimism, while anything below that reflects a more pessimistic outlook. July’s reading rose by 0.4 to 96.6.

Then on Friday RBA Governor Philip Lowe will speak before the parliamentary House Economics Committee. Lowe is likely to reiterate the RBA’s relatively optimistic outlook for medium-term growth that the bank outlined in its interest rate announcement and statement on monetary policy last week.

Here’s the schedule of this week’s data releases on the Australian calendar (via Commsec):

International

It’s a relatively quiet week for headline data releases on the international calendar.

Key data points start in New Zealand on Thursday, with the Royal Bank of New Zealand’s official cash rate announcement. Interest rates are expected to stay on hold at 1.75%.

Then on Friday after markets close, the US releases CPI inflation data. The annual rate of inflation is expected to grow at 1.7%, with underlying inflation (less food & energy) forecast for 1.8% growth.

Despite a strong jobs report on Friday, the inflation outlook in the US remains relatively subdued. The CME Fedwatch tool is currently pricing the probability of another interest rate hike before the end of the year at 44.8%.

Here’s the international calendar (also via Commsec):

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