In Australia this week, it’s jobs day on Thursday and the financial services Royal Commission is back, with the sixth round of the hearings focusing on insurance.
Internationally, both the European Central Bank and the Bank of England will make policy announcements. And the US has August inflation data on Thursday night, with the Federal Reserve on track to raise rates again later this month.
All-important US employment data on Friday night showed jobs growth was slightly above forecasts. But it was wage growth which caught the market’s attention — it rose by 0.4% in August to a nine-year high of 2.9%.
The US dollar strengthened and benchmark US 10-year bond yields climbed to 2.94%. Markets are also braced this week for the Trump administration to announce tariffs on another $US250 billion worth of Chinese goods.
The combination of a stronger USD and lingering trade fears saw the Aussie dollar get poleaxed on Friday night.
The AUD fell by another 1.3% and will start the week at 0.7105 US cents, its lowest level since February 2016.
To the week ahead:
The Reserve Bank’s Michele Bullock gives a speech on Monday called “The Evolution of Household Sector Risks” (1:05pm AEST).
It’s likely to attract some interest amid the ongoing housing downturn, given the RBA has consistently cited financial stability concerns as one of the main reasons for not cutting rates.
Then markets will get an update on the economy via two key monthly indicators; NAB’s business survey (Tuesday) and the Westpac consumer confidence index (Wednesday).
And the main event of the week will be August employment numbers from the ABS on Thursday (11:30am AEST). The July print missed forecasts although a drop in the participation rate saw unemployment tick lower.
The median forecast among economists surveyed by Bloomberg is for 18,000 jobs to be added, with the unemployment rate holding steady at 5.3%.
And the sixth round of the financial services Royal Commission starts on Monday and runs throughout the week. The focus of this round will be insurance.
There’s a data deluge out of China to start the week, with August inflation on Monday along with money supply data and new loan growth.
But key data abroad will be led by US inflation data on Thursday night.
“A tight labour market is putting modest upward pressure on business costs and selling prices, but we expect core inflation to remain at 2.4%/y,” CBA said.
Also on Thursday night both the ECB and the Bank of England will make interest rate announcements, with no major policy changes expected from either bank.
There’s also the usual round of speakers from the US Federal Reserve, and US retail sales on Friday night.
Here’s the full calendar, via Westpac: