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

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Key data in Australia this week will be led by monthly employment figures on Thursday.

After Asian trade finished on Friday, it was a relatively quiet session with global stocks little-changed to end the week.

A tone of caution was still evident amid lingering geo-political concerns and the US bracing for Hurricane Irma.

There were no changes to recent capital flows which have seen the US dollar index trading at multi-year lows.

Safe-haven currencies including the Japanese yen and Swiss franc continued to see demand, bond yields remain compressed and gold is still trading near its 2017 high.

The Australian dollar retreated from its earlier peak to close at 0.8055, after reaching its highest level since May 2015 above US81 cents.

Australia

After a huge week of headline data to start the month, it’s a quieter week ahead with Thursday’s August employment figures (11:30am AEST) the main focus.

The market is forecasting another 20,000 jobs to be added, with the unemployment rate to stay at 5.6%.

The current streak of consecutive monthly jobs growth stands at 10 — the longest such run since 2011.

While steady employment growth has yet to translate into higher wages, the consistent strength in employment data has helped give policy-makers comfort that the economy is tracking in the right direction.

Prior to the employment report, there’s the NAB business confidence index for August on Tuesday, followed by the Westpac/Melbourne Institute consumer sentiment survey on Wednesday.

Both indexes will be important in assessing the recent dynamic in the Australian economy, where a noticeable split between business and consumer sentiment has become apparent.

While business confidence in July hit its highest level since 2008, Westpac’s consumer confidence index was the exact opposite — recording its fourth straight month of falls, also for the first time since 2008.

So far, steady employment growth and strong business conditions have been unable to bring Australian consumers out of the doldrums.

That split will be worth monitoring, with a number of analysts expressing doubts around the outlook for domestic consumption following last Wednesday’s release of quarterly GDP figures.

Here’s the schedule of Australian data this week:

Data via Westpac and ANZ

International

Key data releases abroad kick off on Tuesday night with August inflation figures for the UK. The consensus forecast is monthly CPI growth of 0.4%.

On Wednesday the US has producer price inflation (PPI) data for August, with expectations of a 0.2% rise after a 0.1% fall in July.

Across the pond, Germany also has August inflation data on Wednesday while the broader Eurozone will report quarterly employment figures.

Following a solid run of recent data, China will report on August retail sales and industrial production data on Thursday.

Then on Thursday night the US has monthly CPI inflation data for August. According to data from Bloomberg, higher energy costs will lift annual inflation growth to 1.9%, but core inflation will remain below the US Fed’s 2-3% target at 1.6% growth.

Also on Thursday night, the Bank of England makes its interest rate announcement. The benchmark cash rate in the UK is expected to stay on hold at 0.25%.

Here’s the full international calendar:

Data via Westpac and ANZ

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