It’s a quieter data calendar in Australia this week, but markets will be braced for more volatility after US stocks got sold off into the close on Friday night.
The Dow lost more than 2% to cap the worst week for US stocks since March, after key US jobs data missed estimates with only 155,000 jobs added in November.
Trade war fears continued to linger following the arrest of Huawei’s CFO, and the risk-off tone drove demand for gold, US treasuries and the Japanese yen.
The Aussie dollar will start the week under pressure at around US72c while ASX futures closed 30 points lower.
Meanwhile, political risk flared again in Europe over the weekend with another round of violent anti-government protests in Paris.
So with multiple domestic and global risk factors still apparent, this December is looking like anything but a quiet end to the year.
If you’re looking for some thought-provoking listening on current economic events, here’s the latest edition of our markets and economics podcast Devils and Details. This week it features Commonwealth Bank senior economist Gareth Aird, and ends up in a conversation about population growth and why economists are too focused on headline aggregate numbers rather than the lived experience of people in the economy. You can find it here on iTunes or by searching “Devils and Details” wherever you get your podcasts. It’s online at this link, or you can tune in below.
To the week ahead:
The two benchmark monthly sentiment surveys are out this week, with NAB business on Tuesday followed by Westpac’s consumer index on Wednesday.
With Australian house price falls now accelerating, both will provide an update on the outlook for business investment and domestic consumption after last week’s big miss in Q3 GDP.
There’s also a speech on Monday morning (8:35am AEDT) from the RBA’s Christoper Kent called “US Monetary Policy and Australian Financial Conditions”.
“With Australian financial conditions constantly under examination and the outlook on the path of US monetary policy in flux, Kent’s speech is timely”, ANZ said.
Also on Monday, the ABS will release monthly housing finance data for October.
Key data in the US will be back under “intense scrutiny”, ANZ says, now that “the Fed has switched off-auto pilot and the trajectory of policy is more contingent on data”.
November inflation data on Wednesday night highlights this week’s US calendar.
“The CPI will see some weakness from lower oil prices in November, but core inflation is expected to rise. If that fails to manifest, the market is likely to react harshly,” ANZ said.
Also this week, the European Central Bank will hold its policy meeting on Thursday night where it’s expected to announce the end of its bond purchasing program.
And UK lawmakers are scheduled to vote on the Brexit withdrawal agreement on Tuesday night, although Prime Minister Theresa May is now expected to delay the vote to try and negotiate a better deal with the EU.
Here’s this week’s full calendar, via ANZ:
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