It’s a quiet week ahead on the domestic data front, with market moves more likely to be driven by key events on the international calendar.
In particular, it’s a busy start to the week in the US with Fed speakers, meetings on tax-cut legislation and monthly inflation data all on the schedule.
The S&P500 closed at another record high on Friday as US markets reopened, led by gains in tech and energy stocks as the VIX volatility index fell to an all-time low.
Stocks in China were steady after Thursday’s sharp selloff caught the market’s attention.
On currency markets, the euro capped a strong week by rising to a two-month high above $US1.19, following more positive economic data out of Germany.
Bonds were little-changed to end the week, with the yield on US and Australian government bonds edging higher across the curve, while Chinese 10-year bond yields dipped back below 4%.
The Aussie dollar was mixed against the major currencies, falling slightly against the greenback to close at 0.7616 US cents.
There’s relatively little on the macroeconomic calendar to start the week, until the ABS releases data on Thursday for building approvals and private sector capital expenditure.
Private sector capex figures for the September quarter will give an update on the investment intentions of corporate Australia, after the Q2 reading showed signs of life and companies indicated they were planning to deploy more capital during the August reporting season.
For construction data, the market consensus is for new building approvals to decline by 1% in October, after a 1.5% gain in September with the sector showing surprising resilience in recent months.
Also on Thursday, the RBA issues its monthly update on private sector credit, which had sluggish growth in September due to falls in business and personal lending.
Then on Friday, CoreLogic will release its house price index for November, after monthly figures for October showed house prices in Sydney had their biggest fall in 18 months.
Here’s this week’s domestic data calendar:
Key events abroad kick off on Tuesday night when Jerome Powell, the nominee to become the next chair of the Federal Reserve, appears before the Senate Banking Committee for his confirmation hearing.
With the outlook on further rate hikes in the US next year looking more unclear, Powell’s appearance may shed some light on his leadership plans once he steps into the role in February.
Also on Tuesday, Donald Trump is scheduled to meet with Republican Senators to discuss details of the administration’s tax-cut proposal.
Then there’s more on the Fed speaker front — New York Fed Governor William Dudley will give two talks on the US economy on Tuesday and Wednesday, while US Fed Chair Janet Yellen is scheduled to appear before the Joint Economic Committee of Congress on Wednesday night.
Inflation will be back in focus on Thursday night with the release of monthly income and expenditure data. Those figures include the PCE inflation reading, which is the preferred inflation measure of the US Federal Reserve.
On Thursday night, Europe has the unemployment rate for October — expected to hold steady at 8.9% — along with a preliminary reading for November inflation.
Thursday night is also the key date for energy markets, with OPEC leaders scheduled to meet in Vienna to discuss an extension to oil supply cuts which will expire at the end of March.
Full international calendar below: