Australia’s labour market will be in focus this week, with quarterly wage data on Wednesday followed by the monthly employment report on Thursday.
ASX futures closed 37 points lower Friday night, after the S&P500 fell by 0.9%. Falls in US stocks were led by the energy sector, as oil prices fell further into a bear market.
The Australian dollar will open the week at 0.7225 US cents, after losing some ground on Friday night as the US dollar strengthened against all of the major pairs.
To the week ahead:
Amid a backdrop of low inflation and falling house prices, the strength of Australia’s labour market has taken on central importance in the outlook for interest rates.
With that in mind, all-important Q3 wage data is up on Wednesday, with a median forecast wage growth to rise by 0.6% q/q, leaving annual growth at 2.3%.
ANZ expects wage growth to rise to a four-year high of 2.4%, due in part to the July 1 minimum wage increase.
“With the RBA already expecting a solid fall in the unemployment rate and little upside in inflation, it is unlikely that the data will be a sustained driver of the AUD,” ANZ’s currency strategists said.
Wage data will be followed by employment figures on Thursday, with the economy expected to add another 20,000 jobs in October after Australia’s jobless rate fell to a six-year low last month.
Also this week, markets will get an update on the business outlook with NAB’s monthly business survey for October on Tuesday morning.
And on Thursday, RBA Deputy Governor Guy Debelle will appear on a panel with the heads of ASIC and APRA, CBA’s Belinda Allen noted.
The panel discussion is titled “Assessing the effects of housing lending policy measures”.
Italy is scheduled to present its revised 2019 budget to the European Commission on Tuesday night, amid ongoing tension around the government’s spending plans.
Also on Tuesday there’s UK employment data. Then on Wednesday there’s a triple-shot of data out of China, with industrial production, new loan growth and retail sales for October.
ANZ expects the industrial numbers will show that China’s economy is still slowing.
“More important will be the new yuan loans, which will give us some idea of how recent stimulus is progressing through the economy,” the analysts said.
Later on Wednesday, markets will get a global inflation update with October CPI figures for the UK and the US.
And on Thursday night there’s the Philly Fed manufacturing index in the US, which follows comments from the US Fed last week noting a slowdown in domestic business investment.
“We will be watching capex expectations, as further declines will look a touch concerning,” ANZ said.
Here’s ANZ’s full weekly calendar: