With the RBA decision and US non-farm payrolls out of the way, traders have a much quieter week ahead of them in Australia.
Of course, Treasurer Joe Hockey will step up to the dispatch box at 7.30pm Tuesday. And while it’s important for confidence in both the business and consumer sectors, the likelihood is the current small target approach signalled by the government is unlikely to move markets too far one way or the other.
Indeed, the Federal Budget has not been a market moving event for many years.
That doesn’t mean traders and the ratings agencies won’t be watching the expected path of the Australian sovereign debt profile, growth expectations, and expected deficit. It’s just that with the current government settings and signals on budget measures traders are unlikely to be overly moved by Hockey’s Budget.
Elsewhere this week, Monday’s NAB monthly business survey will be interesting given the lift in the last survey, which was ignored by the RBA, who in part eased because of lacklustre business investment plans.
That’s not unreasonable given stated capex plans. But the NAB survey, and whether last month’s improvement in trading and profitability was maintained, is important for how the economy shapes up over the next 6 -months and whether the RBA’s “soft easing bias”, apparent in Friday’s statement on Monetary Policy, needs to be acted upon.
Australian home loan data, and the important investment loan data will be released Tuesday, while on Wednesday wages data will hit the screens at 11.30am AEST.
That’s it for Australia, but there are a few key releases offshore which shape and move markets.
Monday morning Asia will have to deal with the rate cut in China of 25 basis points from the PBOC on Sunday
The Eurogroup meeting Monday, at which Germany sees no Greek debt deal and warned against default over the weekend is important. Chinese loans and German wholesale prices are also out.
British industrial production is out Tuesday, but the ramifications from the election are still the key driver of Sterling and UK market,s which are likely to continue to benefit this week. That means GDP on Wednesday, if strong, is likely to be important as it will inform the market on confidence and the path of BoE interest rates.
German GDP on Thursday is important as well, given that concerns about the path of German interest rates over the past week. Friday saw Bunds rally but a strong print is likely to have an asymmetric impact on markets and the Euro. CPI in Germany, Italy, France and Spain along with EU GDP and the ECB meeting need to be watched closely.
In the US retail sales, PPI and jobless claims will be important as well as industrial production and the Bank of Japan meeting to round out the week.
Here’s Westpac’s excellent diary of all the key events and data for the week: