The data calendar remains relatively light this week, which means key policy updates and political events will again be in the spotlight.
The main story on global markets to end the week was yet another sharp fall in oil prices.
Brent crude fell to a 2018 low under $US60 barrel on Friday night, as global growth fears weigh on the demand outlook at the same time as oil supplies continue to increase.
ASX futures closed 37 points lower after the S&P500 fell by 0.66% to end the week, dragged lower by energy stocks. Trading volumes were low as US markets returned from the Thanksgiving holiday.
In currencies, the US dollar drifted higher against most the of major pairs and the Australian dollar will open on Monday back at 0.7231 US cents.
To the week ahead:
On the data front there are two quarterly updates from the ABS, with Q3 construction activity (Wednesday) and private sector capital expenditure (Thursday).
Both releases are “building blocks for Q3 GDP”, CBA’s Belinda Allen said. For construction, the consensus forecast is for 1% growth, after a rise of 1.6% in Q2.
“There is a high level of residential construction underway, although the peak in approvals is behind us and we should start to see lower construction numbers,” Allen said.
In addition, CBA forecasts “Q3 capex spending to rise by a solid 1.0% after a fall of 2.5% in Q2”.
“We expect the fourth estimate of 2018/19 spending to be $107 billion. Anything larger than this would be considered an upgrade, anything lower a downgrade,” Allen said.
There’s also a speech from RBA governor Philip Lowe on Monday morning called “A Journey Towards a Near Cashless Payments System”.
That will be followed by a speech from the RBA’s Christopher Kent on Monday afternoon (2pm AEDT) called “Securitisation and the Housing Market”.
And on Friday, the RBA will have monthly data on private sector credit, which will give an update on the ongoing slowdown in housing credit growth.
A total of four committee members from the US Fed are scheduled to speak throughout the week, the highlight being Fed chair Jerome Powell on Wednesday night.
ANZ’s currency strategists are watching for “comments on the path of rate hikes, especially as the market took the latest communication as tilting dovishly“.
However, “we think Powell will not back away as the market expects, but will reiterate the need for further gradual rate rises”.
Political developments in Europe are also on the radar, with more talks expected between the Italian government and the European Council over Italy’s draft budget.
“We suspect the Italian government will make spending revisions to avoid punishment,” ANZ said.
An auction of Italian government bonds on Thursday night will give markets an update of the perceived risks posed by Italy’s debt crisis.
There’s also new home sales data out in the US, while Cyber Monday sales to start the week will give an update on US consumer confidence.
Here’s this week’s full calendar, via ANZ:
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