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

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Australia’s labour market will be in focus this week, with key data led by Wednesday’s Q2 wage price index and monthly jobs figures on Thursday.

Monday trade in Asia will follow on from a wild session for global markets on Friday.

Action was centred around the Turkish lira, which slumped to a new record low against the greenback following another round of US sanctions.

The lira’s collapse gave rise to contagion fears, particularly for European banks with exposure to Turkish assets.

The euro dipped to a 13-month low as July inflation data in the US showed core inflation growth came in higher than forecast. European stocks fell sharply, while safe-haven flows drove demand for US government bonds.

Despite all that, ASX futures markets closed 11 points higher ahead of Monday’s open, as the AUD finished the week below US73 cents.

To the week ahead:

Australia

Wednesday’s Q2 wage price index is the key release. Given Australia’s extended run of low wage growth, any significant change will alter the outlook for inflation and interest rates.

The median forecast is for annual wage growth to rise by 2.1% in the three months ended June 30. Data for the March quarter showed little evidence of wage pressures, particularly in the private sector.

In last Tuesday’s interest rates announcement, the RBA repeated its comment from July that wage growth “appears to have troughed”. However, the bank maintained its view that low wage growth is likely to continue for a while yet.

Next up, there’s monthly jobs figures on Thursday, with the economy expected to add another 15,000 jobs in July with the unemployment rate holding steady at 5.4%.

It follows a booming jobs print in June, although not all analysts were convinced about the veracity of the data.

Also this week, we’ll get an update on domestic business conditions in NAB’s monthly survey on Tuesday. ANZ currency strategists highlighted risks to the sub-index for business confidence.

“Early indicators are suggesting a sharp drop is likely, though the level should remain elevated in a historic context,” ANZ said.

The business survey will be followed by Westpac’s consumer confidence index in Wednesday, which rose to a four-year high last month.

International

Strength in the US dollar is one of the main themes on global markets at the moment, and in that context markets will be focused on a busy week of data prints out of the US.

Tuesday night’s small business survey will be followed by July data for retail sales and industrial production on Wednesday. Then there’s building approvals and new housing starts on Thursday.

Across the pond, July inflation data for the UK “will be a critical release”, ANZ said. “Just as important will be the employment data” on Tuesday night, which includes average earnings for the June quarter.

Elsewhere, China has July data for retail sales, industrial production and fixed asset investment on Tuesday.

And in Europe, Q2 GDP figures and the ZEW business survey in Germany on Tuesday night will give an update on the European outlook.

“The euro continues to struggle to find a stable base, and the data this week will likely keep that struggle at the fore,” ANZ said.

Here’s the full calendar, via ANZ (key events for currency markets in dark blue):

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