Central banks will yet again be the focus of the markets this week.
We’ll get RBA Minutes, Mario Draghi speaks, there’a a BoJ Monetary Policy Statement and press conference, and there are minutes from the BoE. The central event for the week is the FOMC meeting, its statement, “dots chart”, and Janet Yellen’s press conference.
In many ways, almost nothing else matters but the Fed after the euro closed below 1.05 on Friday night New York time. That’s its lowest weekly close in 12 years and it dragged the Aussie dollar back to just above 76 cents. Likewise the Dow and S&P ended down on the week and looking vulnerable if the Fed is aggressive in its tightening intentions. The ASX looks set to be dragged hither and yonder with moves in the US this week.
But that doesn’t mean that there is nothing of note here at home or around the region.
The RBA minutes to be released at 11.30am AEDT Tuesday will be unusually important as traders, pundits and economists pore over the words for clues on whether the RBA is really concerned enough about Sydney’s super-hot property market to halt its easing cycle after just one cut and at 2.25%.
Almost no-one believes that.
But if the RBA was concerned about Sydney property prices previously they’ll be super worried after Saturday’s auction results around the city. It’s only one city of around four million in a nation of 23 million. But when one of the City’s most prominent real-estate agents, Kingsley Yates of Ray White Lower North Shore, says “I have never seen anything like it – it was like the Easter Show, and more unusual” everyone – including the RBA – will take notice.
Also out in Australia are New Motor Vehicle sales on Monday, the Westpac Leading Index on Wednesday, the RBA Bulletin and FX Transactions on Thursday, before Governor Glenn Stevens speaks at the American Chamber of Commerce in Australia on Friday.
On the political front here it is going to be interesting how to watch how the Treasurer moves on from his odd idea of letting younger Australians access super to buy a house. The Opposition is likely going to have some fun with the Prime Minister’s strange onion eating incident. Of course with both houses sitting, the new Senate arrangements after Glenn Lazarus quit the PUP party will be interesting given the Government is still prosecuting last year’s budget – particularly Christopher Pyne’s education reforms.
Offshore the major non-central bank releases are US Industrial Production and TIC flows on Monday night, EU CPI And German ZEW survey Tuesday night along with US housing starts for February. Wednesday will tell us if the Yen’s acute weakness is really helping corporate Japan with the release of the trade data for February. We’ll also get Chinese house prices on Wednesday.
Thursday will be all about what the Fed does that morning but NZ GDP for Q4 2014 is out along with Swiss trade data which will instructive since the SNB blew up Forex traders back in January. US jobless claims and Philly manufacturing index are out. Friday is about Canada with the CPI due.
Here’s Westpac’s excellent diary of all the key events for the week.