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 September retail sales data on Thursday, following a poor result for the sector in August.

A busy international calendar kicks off with a key measure of US inflation on Monday night, which precedes the US Federal Reserve’s interest rate announcement on Wednesday.

The main theme on global markets on Friday night was continued weakness in the Euro, after the European Central Bank (ECB) detailed how it will taper its bond purchasing program next year.

The dovish nature of Thursday’s announcement drove a two-day fall in the Euro of 1.8% to end the week.

US stocks closed at new record highs, led by gains in tech stocks as Amazon, Google and Microsoft all beat Q3 earnings estimates.

Bond markets largely shrugged off the first reading of Q3 GDP in the US, which smashed estimates despite the impact of hurricanes in September. Benchmark 10-year US treasury yields dipped slightly to 2.42%.

The Australian dollar bounced off its Friday-afternoon lows in the wake of the High Court’s parliamentary citizenship decision, which saw Deputy Prime Minister Barnaby Joyce ruled ineligible to sit in parliament.

After falling as low as 0.7626 US cents, the AUD closed the week at 0.7677 — down 1.7% for the week after Wednesday’s data on quarterly inflation growth missed expectations.

Australia

CoreLogic’s auction clearance rates summary, updated for weekend activity, may get some attention on Monday morning given the record amount of homes that hit the market last week.

Thursday’s retail sales data will be in focus following a bad miss in August, when retail sales declined by 0.6% against forecasts of a 0.3% gain. The market’s expectation is for a return to growth of 0.4% in September.

Also on Thursday, the ABS has Australia’s balance of trade figures, with Australia’s trade surplus expected to rise to $1.1 billion in September from $989 million in August.

Here’s a schedule of this week’s domestic data releases (via ANZ):

International

Looking abroad, key data starts in the US on Monday night with personal income & expenditure data for October. That will include the PCE core inflation index, which is the US Fed’s preferred measure of inflation.

US core inflation growth peaked at 1.9% in February, just shy of the Fed’s 2-3% target range. It subsequently tailed off over the course of the year, and Monday’s reading is expected to show 0.2% growth in October leaving the annual rate at 1.4%.

The result of Monday’s inflation reading will be a key indicator ahead of Wednesday night’s interest rate announcement by the US Federal Reserve, with no change currently expected ahead of another rate hike in December.

The Bank of Japan will make its interest rate announcement on Tuesday, with rates almost certain to stay in negative territory at -0.1% following Shinzo Abe’s recent election victory, which was a key signal to the market that Japan’s ultra-accommodative monetary policy settings will be maintained.

Then on Tuesday night the Eurozone will get a preliminary reading for October inflation growth (forecast at 1.1%), and the first reading of Q3 GDP (forecast at 0.6% growth), as well as the finalised unemployment rate for September.

New Zealand has employment figures for Q3 on Wednesday, which includes the unemployment rate and quarterly changes in average hourly earnings.

While rates in Japan and the US are likely to stay on hold, it’s a different story for the Bank of England’s rate announcement on Thursday night, with the BoE expected to raise the benchmark rate to 0.5% from 0.25%.

Then on Friday night all eyes will be on US employment figures for October. Forecasts are for more than 300,000 jobs to be added as the labour market rebounds from the impact of hurricanes in September, while wage growth is expected to remain subdued.

A summary of the key releases on this week’s international calendar is shown below (also via ANZ):

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