The Experts

James
Craig James
Economy Expert
+ About Craig James
About Craig James

Craig James is CommSec’s Chief Economist.

On leaving school Craig James joined the (then) Rural Bank, whilst undertaking university studies. He received his Bachelor of Commerce (Economics) at University of NSW in 1984 and then a Master of Commerce (Economics) at the same university in 1988.

He remained at the Rural Bank, which became the State Bank over time and then Colonial, working in branches, Corporate, Planning and Economic Research.

He became chief economist of Colonial Group in September 1987, before becoming chief economist at CommSec in August 2000 with the Commonwealth takeover of Colonial.

In 2002 Craig had a sea-change, joining the Australian Financial Review. He had always wanted to pursue a role in journalism and enjoyed the role as an economic commentator and analysts, finding that he could pursue a journalistic-type role as well as doing more electronic media work at CommSec and rejoined the group in 2003.

On taking the reigns of chief economist at Colonial, Craig endeavoured to style their research in a “user-friendly” way – something that set their research apart and still does today. The approach has been successful in their media work and in promoting Colonial, and then CommSec, to the general public. CommSec is the most quoted economic group in the mainstream media.

CommSec economic reports are a bit different in that they devise tools such as the ‘Mums and Dads’ share index and the iPod index, and undertake research on the weather and demographic changes to show how they affect the economy.

Craig currently does around 2-3 regular TV crosses a day, ad hoc radio and newspaper interviews and writes regular commentaries as well as presenting to staff, clients and external organisations.

Outside work, Craig's main interests are athletics (cross country in winter), weight training, reading widely across a range of newspapers, magazines and electronic media, and trying to keep up with the children.

Australia: Reserve Bank Board minutes in focus

Friday, August 16, 2019

A quieter week is in prospect in the coming week on the economic and financial calendar. Featured is the release of minutes of the Reserve Bank Board meeting, held on August 6.

On Tuesday

The weekly series of consumer confidence will be released by Roy Morgan and ANZ. The low value of the Aussie dollar and concern about how low interest rates may fall in Australia are issues for Aussie consumers. Also on Tuesday, the Reserve Bank releases minutes of the Board meeting held on August 6 – the meeting that decided to leave interest rates unchanged at 1.00 per cent. The new economic forecasts likely dominated discussion at the meeting. Looking out over the next 12-18 months, the Reserve Bank tips stronger economic growth, a modest lift in inflation and slightly lower jobless rate than applies currently

On Wednesday

On Wednesday, the Department of Employment, Skills, Small and Family Business releases the Internet Vacancy Index – a measure of available jobs in the economy. In June the IVI fell by 0.6 per cent – the sixth consecutive decline. And the IVI is 6.7 per cent down on a year ago.

On Thursday

On Thursday, the Australian Bureau of Statistics (ABS) releases detailed labour force estimates for July. Each month the ABS releases headline data like employment, unemployment and the participation rate. Then a week later the ABS releases for detailed estimates including demographics. For instance, it is possible to get the number of 60-65 year old Aussie in the job market. The Reserve Bank Governor recently highlighted the increasing participation of senior workers in the job market. Also on Thursday, Commonwealth Bank, in conjunction with Markit, releases August ‘flash’ (or early) estimates on activity in manufacturing and services sectors.

On Sunday

On Sunday August 25 Australian time at 2.25am (August 24 10.25am Wyoming, US), the Reserve Bank Governor is due to deliver a speech

Overseas: US housing activity in focus

Just like in Australia, the US economic and financial calendar is sparsely populated in the coming week.

On Tuesday

The week begins on Tuesday, with the releases of the regular Redbook weekly reading on US chain store sales.

On Wednesday

On Wednesday, the minutes of the last Federal Reserve Open Market Committee (FOMC) meeting are issued. The minutes will provide some guide about the likelihood of future interest rate cuts. Also on Wednesday, weekly mortgage applications figures from the US Mortgage Bankers Association are due with the July figures on existing home sales. In June, home sales fell 1.7 per cent to an annual rate of 5.27 million. According to Trading Economics the median house price went up to an all-time high of $285,700 in June from $278,200 in May and $277,700 a year earlier. Year-on-year, existing home sales dropped 2.2 percent, the 16th straight annual decline in home sales.

On Thursday

On Thursday in the US, the weekly figures on jobless claims are issued, along with the Conference Board leading index and the Kansas Federal Reserve manufacturing gauge. The leading index fell 0.3 per cent in June – the first decline since December 2018. The Conference Board says growth is likely to remain slow in the second half of the year. As such, the leading index supports the decision of the Federal Reserve to trim rates. Also on Thursday, August ‘flash’ (or early) survey estimates of purchasing managers are issued in Japan, the US, France, Germany and the Eurozone. The results provide insights into manufacturing and services sector activity. And beginning on Thursday (through to Saturday) is the annual gathering of central bankers in Jackon Hole Wyoming, US. This year the Economic Symposium is entitled “Challenges for Monetary Policy”. How apt.

On Friday

On Friday, US new home sales data is issued. Sales of new single-family homes rose 7 per cent to a seasonally adjusted annual rate of 646,000 in June – the first rise in two months but still below forecasts. Economists tip another 6 per cent increase in sales in July. While interest rates are low and the job market is strong, analysts say that a shortage of affordable properties is constraining sales.

Financial markets

The reporting season – the time when listed companies report earnings results – moves into top gear in the coming week. While the data is subject to change, companies expected to report on include:

Monday

Altium; BlueScope Steel; GWA; NIB Health; and Lendlease.

Tuesday

BHP; SEEK; Estia Health; Oil Search; Senex Energy; Tassal; Sonic Healthcare; Charter Hall; Monadelphous; Kogan; Seven West Media.

Wednesday

A2 Milk; Crown Resorts; Nearmap; Dominos; Aventus; Iluka; Emeco; Data#3; McMillan Shakespeare; St Barbara; WorleyParsons; Wisetech; Stockland and; Brambles.

Thursday

Bingo; Origin Energy; Alumina; Perpetual; Zip; Medibank; Santos; Qube; Qantas; Flight Centre; ERM Power; Vocus Group; Southern Cross Media; Coca-Cola Amatil; Scentre Group; MyState; Downer EDI; Webjet; Coles Group; South32; Growthpoint Properties.

Friday

Costa Group; Pilbara Minerals; WPP; Mayne Pharma; Coventry; IRESS, Ardent Leisure; Goodman; BMX.

 

 

 

Good morning, Australia

Monday, August 12, 2019

How’dy USA

In US data, producer prices rose by 0.2% as expected in July. Excluding food and energy, producer prices fell by 0.1% in the month (forecast +0.2%). US share markets fell on Friday. There was uncertainty about the status of official purchases from Chinese telco Huawei. Media reports indicated that while the US Government had blocked dealings with Huawei, the Commerce Department process for special licenses was still going forward. The Dow Jones lost almost 91 points or 0.3% with the S&P500 down 0.7%, while the Nasdaq fell by 80 points or 1.0%. Over the week the Dow lost 0.7%, the S&P 500 index fell 0.5% and the Nasdaq fell by 0.6%.

US treasuries fell on Friday (yields higher). There was profit taking at the end of the week. Investors also mulled negative economic news in the UK, political uncertainty in Italy and confusion about the status of US-China trade negotiations. US 2-year yields rose by 3 points to near 1.65% and US 10-year yields rose by 3 points to near 1.745%. Over the week US 2-year yields fell by 7 points and US 10-year yields fell by 10 points.

US share markets fell on Friday. There was uncertainty about the status of official purchases from Chinese telco Huawei. Media reports indicated that while the US Government had blocked dealings with Huawei, the Commerce Department process for special licenses was still going forward. The Dow Jones lost almost 91 points or 0.3% with the S&P500 down 0.7%, while the Nasdaq fell by 80 points or 1.0%. Over the week the Dow lost 0.7%, the S&P 500 index fell 0.5% and the Nasdaq fell by 0.6%.

Bonjour Europe

European share markets fell on Friday. Political turmoil in Italy dragged the country's share market lower by 2.5%. A surprise contraction of the UK economy in the June quarter weighed on investor sentiment. Uncertainty about the outlook for US-China trade negotiations also reduced investor buying. The pan-European STOXX600 index fell by 0.8%, the German Dax fell by 1.3% and the UK FTSE lost 0.4%. In London trade, shares of Rio Tinto fell by 2.5% and BHP lost 1.8%.

Hello World!

Global oil prices rose by 2-4% on Friday. The number of oil rigs in operation in the US fell from 770 to 764 in the past week - the lowest since February 2018. Saudi Arabia reportedly plans to keep oil exports below 7 million barrels per day in August and September. But the International Energy Agency said global oil demand in the year to May grew at the slowest pace since 2008.The Brent crude price rose by US$1.15 or 2.0% to US$58.53 a barrel. And the US Nymex price rose by US$1.96 or 3.7% to US$54.50 a barrel. Over the week Brent fell by 4.8% and Nymex fell by 3.6%.

Base metal prices generally fell on the London Metal Exchange on Friday. Zinc fell by 3.1% and nickel lost 2.1%. But aluminium fell by just 0.4% and tin rose 0.4%. Over the week nickel rose by 7.4% and lead rose 7.0% while zinc lost 5%.

The gold futures price fell by US$1.00 or 0.1% to US$1,508.50 an ounce. The spot gold price was trading near US$1,497 an ounce in late US trade. Over the week gold rose by US$62.90 or 4.4%. Iron ore was unchanged at US$94.80 a tonne. Over the week iron ore fell by US$13.65 or 12.6%.

G’day Australia

In Australia, no major economic data is expected. In China, data on new vehicle sales is expected. In the US, the monthly budget statement is released with consumer inflation expectations.

 

Australia: Jobs and wages data dominate

Friday, August 09, 2019

In the coming week there will be more insights into the post federal election economic environment in terms of business conditions and consumer sentiment. But the Reserve Bank’s laser-like focus on developments in the labour market gives the jobs and wages data top billing for investors.

On Monday

The week kicks off on Monday when the Reserve Bank releases June data on credit and debit card lending.

On Tuesday

On Tuesday the weekly series of consumer confidence will be released by Roy Morgan and ANZ. The weaker value of the Aussie dollar and recent share market volatility are front-of-mind for Aussie consumers. Also, on Tuesday the NAB business survey is issued for July. Business confidence lifted following the federal election and the interest rate cut in June. But conditions have deteriorated, sitting below the long-run average for the first time in five years.

On Wednesday

On Wednesday, monthly consumer confidence data is released by the Melbourne Institute and Westpac. Confidence fell to a 2year low July, but the receipt of tax refunds and improving property market conditions could boost sentiment. Also, on Wednesday the Bureau of Statistics (ABS) releases the quarterly Wage Price Index for the June quarter. Commonwealth Bank Group economists forecast wages growth of 0.5 per cent in the quarter and an annual growth rate of 2.2%. Subdued wages growth has been associated with low inflation outcomes, while restraining consumer spending.

On Thursday

On Thursday, the all-important jobs report for July is issued. The unemployment rate is expected to remain steady at 5.2% for a fourth consecutive month with 20,000 jobs added. Also, on Thursday, the bi-annual average weekly earnings figures are released by the ABS, providing dollar estimates of wages in the economy across states and industries. June tourism data is released. And Reserve Bank Deputy Governor Guy Debelle delivers a speech: “Risks to the Outlook”.

Overseas: China activity data in the spotlight

The summer lull in US ‘Fedspeak’ and the re-intensification of the US-China trade war elevates Chinese July activity data to the top of the data dais in the coming week. US retail spending and inflation will be in focus too.

On Monday

The week begins on Monday when the US July budget statement is issued. A deficit of US$116 billion is forecast.

On Tuesday

On Tuesday, the regular weekly reading on US chain store sales is due together with data on small business sentiment and consumer prices. Shelter, furnishings, used vehicles and clothing costs all lifted in June. 

On Wednesday

On Wednesday, falling US import and export prices are expected to reaffirm that inflation remains tame. Weekly mortgage applications figures from the US Mortgage Bankers Association are also due. On Wednesday in China, the July activity data is due. Following the upside surprise in June, a ‘give-back’ is widely anticipated as policy support fades. Local government bond issuance - a key support for infrastructure spending - has been dialled back. And retail spending may ease after strong online sales during the mid-year shopping festival. New emission standards are also expected to weigh on car sales.

On Thursday

New home price data follows on Thursday in China. Annual home price growth decelerated from 11.3% in May to 10.8% in June. New home prices rose in 63 cities in June. On Thursday in the US, the weekly figures on jobless claims are issued, along with retail sales, factory, industrial production, homebuilder sentiment, unit labour costs, productivity and business inventories data. Solid consumer demand and confidence is driving retail spending, keeping the US expansion intact. But factory sector health is fragile with industrial production subdued and regional manufacturing readings buffeted by trade tensions.

On Friday

On Friday, US housing starts, building permits and consumer confidence data complete the week. US consumer sentiment is near cyclical highs, supported by low unemployment and solid wages growth. The imposition of tariffs on Chinese-made consumer goods effective September 1, could eventually hit US consumers in the back pocket.

Financial markets

Around 80 Aussie companies are scheduled to announce earnings results in the coming week as the reporting season cranks up a gear. Companies reporting on Monday include Ansell, Argo Investments, Aurizon, Bendigo & Adelaide Bank, GPT Group and JB Hi-Fi.

On Tuesday

On Tuesday: Arena REIT, Challenger and Magellan.

On Wednesday

On Wednesday: Aveo, Computershare, CSL, Dexus, Tabcorp and Vicinity Centres.

On Thursday

On Thursday: ASX, Ausdrill, Blackmores, Breville, Evolution Mining, Iluka Resources, QBE Insurance, SEEK, Super Retail Group, Sydney Airport, Telstra, Treasury Wine Estates and Whitehaven Coal and Woodside Petroleum. 

On Friday

On Friday: Cochlear, Domain, Kogan.com, Newcrest Mining, Nick Scali, Spotless Group and Star Entertainment.

 

 

 

Good morning, Australia

Monday, August 05, 2019

How’dy USA

In US data, non-farm payrolls (employment) rose by 164,000 in July (forecasts +160,000). Job gains in May and June were trimmed by 41,000. The jobless rate was steady at 3.7% as expected. Hourly earnings rose 0.3% (forecast +0.2%). Consumer sentiment rose from 98.2 to 98.4 in July (forecast 98.5). The trade deficit eased from US$55.3 billion to $55.2 billion in June (forecast $54.6bn).

US share markets fell again on Friday as investors focussed on the US-China trade war. Tech stocks were hard hit with the Philadelphia Semiconductor index down 1.6%. Eight of 11 S&P 500 sectors fell. Shares in Exxon and Chevron fell slightly after earnings announcements. The Dow Jones lost 98 points or 0.4% with the S&P500 down 0.7%, while the Nasdaq fell by 107 points or 1.3%. Over the week the Dow fell by 2.6% with the S&P 500 index down by 3.1% and the Nasdaq lost 3.9%.

US treasuries rose on Friday (yields lower). Bonds were favoured over stocks and economic data was generally benign. US 2-year yields fell by 1 point to near 1.71% and US 10-year yields fell by 5 points to near 1.84%. Over the week US 2-year yields fell by 16 points and US 10-year yields fell by 24 points.

Bonjour Europe

European share markets fell on Friday in reaction to the lift in US tariffs on Chinese goods. Trade exposed sectors such as chip makers, miners and automakers fared worst. Shares in Royal Bank of Scotland fell 6.5% after a profit warning. The pan-European STOXX600 index fell by 2.5%, the German Dax fell by 3.1% and the UK FTSE lost 2.3%. In London trade, shares of Rio Tinto fell by 3.4% and BHP lost 4.8%.

Hello World!

Global oil prices rebounded on Friday after falling 7-8% on Thursday in response to the US tariff news. Supporting prices was data showing that the number of oil rigs in operation in the US fell by 6 to 770 in the latest week. Data also showed that China resumed purchases of US oil. The Brent crude price rose by US$1.39 or 2.3% to US$61.89 a barrel. And the US Nymex price rose by US$1.71 or 3.2% to US$55.66 a barrel. Over the week Brent fell by 2.5% and Nymex lost 1.0%.

Base metal prices fell by between 0.7-2.9% on the London Metal Exchange on Friday. Aluminium fell the least with copper down the most. Over the week lead fell by 5.4% and zinc lost 4.4% but nickel rose 2.7%.

The gold futures price rose by US$24.70 or 1.7% to US$1,445.60 an ounce. The spot gold price was trading near US$1,440 an ounce in late US trade. Over the week gold rose by US$26.30 or 1.9%. Iron ore fell by US$5.45 or 4.8% to US$108.45 a tonne. Over the week iron ore fell by US$10.30 or 8.7%.

G’day Australia

In Australia, new vehicle sales data may be issued with the services purchasing managers index. A Bank Holiday is observed in NSW. In China the Caixin services index is issued. In the US, the ISM services index is released with new vehicle sales data.

 

Australia: Reserve Bank dominates

Friday, August 02, 2019

On Monday

The week kicks off on Monday with the release of services surveys from AiGroup and CBA. And the Melbourne Institute’s inflation gauge is issued for July.

On Tuesday

On Tuesday all eyes will be on Martin Place, Sydney, when the Reserve Bank announces its interest rate decision at 2.30pm AEST. We expect the Board to ‘sit pat’ in August - continuing to observe incoming data - after successive rate cuts in June and July. Stimulus is expected to boost economic activity in the second half of the year. Also, on Tuesday, the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Tax refunds and lower mortgage rates are supporting consumer sentiment. Also, on Tuesday, the Bureau of Statistics (ABS) releases international trade data and ANZ provides an update on job advertisements. Australia’s external sector is in great shape. Commonwealth Bank economists expect a bumper trade surplus of $6 billion in July.

On Wednesday

On Wednesday, the ABS issues new lending data for June. Property market conditions - especially in Sydney and Melbourne - have improved through June and July, boosting hopes of an eventual stabilisation in housing finance approvals. Also, on Wednesday, the AiGroup releases the Performance of Construction Index for July.

On Thursday

On Thursday, Reserve Bank Assistant Governor (Financial System), Michele Bullock, speaks at the Toowoomba Chamber of Commerce Business Breakfast at 7.30am AEST.

On Friday

And on Friday the Reserve Bank releases its Statement of Monetary Policy. All eyes with be on the Board’s economic (GDP) growth and inflation forecasts. And Reserve Bank Governor Philip Lowe appears before House of Representatives' Standing Committee on Economics in Canberra.

Overseas: Reserve of New Zealand set to cut rates and China data in the spotlight

In the absence of tier-1 data releases in the US, investor focus will turn to China where international trade and inflation data are released. Across the Tasman, the Reserve Bank of New Zealand is widely expected to cut rates.

On Monday

The week begins on Monday in China, when the Caixin survey on services activity is issued for July. Also, on Monday in the US, the ISM services gauge is released. A rebound is expected after services sector activity eased to the lowest level in two years in June. Vehicle sales are also provided by Ward’s Automotive.

On Tuesday

On Tuesday, the regular weekly reading on chain store sales is due together with the JOLTS series of job openings and IBD/TIPP Economic Optimism Index. Total job vacancies exceeded the number of unemployed Americans by 1.44 million in May. Skills shortages have pushed the US jobless rate down to 49-year lows.

On Wednesday

On Wednesday, the Reserve Bank of New Zealand is widely expected to cut the official cash rate by 25 basis points to 1.25%. The most recent statement from the Monetary Policy Committee cautioned that, “more support from monetary policy was likely to be necessary.” On Wednesday in the US, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. June consumer credit (or lending) data is also issued and expected to remain steady at US$17 billion.

On Thursday

In China on Thursday international trade data is issued by the National Bureau of Statistics. And consumer and producer prices data are released on Friday. Consumer prices are lifting due to elevated pork prices because of the African Swine flu epidemic. But risks of factory deflation are rising due to the US-China trade war. On Thursday in the US, the weekly figures on new claims for US unemployment insurance are issued, along with wholesale trade sales and inventories data. Inventories can influence the pace of economic activity.

On Friday

On Friday, US producer prices round out the week. Core producer prices increased in June, driven by a lift in trade services prices, implying a potential stabilisation in US inflation.  

Financial markets

The Australian corporate reporting season moves into first gear with a bevy of major companies expected to release earnings results. Companies reporting on Monday include Advance NanoTek, Cape Range, ImExHs and Universal Biosensors.

On Tuesday

On Tuesday: BWP Trust, Empyrean Energy, Shopping Centres Australasia Property and Zenith Energy. 

On Wednesday

On Wednesday: Commonwealth Bank, FFI Holdings, King Island Scheelite, Reckon, Suncorp, Transurban and Zip.    

On Thursday

On Thursday: AGL Energy, AMP, Charter Hall Education Trust, IAG, Navigator Global Investments and Mirvac.

On Friday

On Friday: Alliance Aviation, Baby Bunting, Carpenteria Resources, Orora, REA and Strategic Energy Services.

 

Good morning, Australia

Monday, July 29, 2019

How’dy USA

In US data, the economy grew at 2.1% annual pace in the June quarter (forecast +1.8%). The inflation measure - the core personal consumption deflator - rose at a 1.8% annual pace (forecast 2.0%).

US share markets rose on Friday with technology leading the way. On earnings news, shares in Alphabet (Google) rose 9.6% and shares in Twitter rose 8.9% while Amazon fell 1.6% and Intel fell 1.1%. Shares in McDonalds rose 2.1% to record highs after sales beat forecasts. Traders look hopefully towards new US-China trade talks on Tuesday. The Dow Jones rose by 51 points or 0.2% with the S&P500 up 0.7% to record highs and the Nasdaq gained 92 points or 1.1% to record highs. Over the week the Dow rose by 0.1% with the S&P 500 index up 1.7% and the Nasdaq up 2.3%.

US treasuries fell on Friday (yields higher). The US economy grew slightly faster than forecasts in the June quarter. US 2-year yields rose by 1 point to near 1.87% and US 10-year yields rose by 1 point to near 2.08%. Over the week US 2-year yields rose 3 points and US 10-year yields rose by 5 points.

Bonjour Europe

European share markets rose on Friday. Shares of Vodafone rose 10.6% on plans to separate its towers unit in Europe into a new company worth upwards of 18 billion euros ($20 billion). Media stocks also gained 2.7%. Shares in Nestle rose 1.8% in reaction to earnings news. The pan-European STOXX600 index rose by 0.3%, the German Dax was up by 0.5% and the UK FTSE lifted 0.8%. In London trade, shares of Rio Tinto rose by 0.7% but BHP lost 0.2%.

Hello World!

Global oil prices rose by up to 0.3% on Friday. Worries about the safety of vessels travelling through the Strait of Hormuz still dominate. The US economy also slowed by less than feared in the June quarter. The number of oil rigs in operation in the US fell by 3 to 776 in the latest week. The Brent crude price rose by US7 cents or 0.1% to US$63.46 a barrel. And the US Nymex price rose by US18 cents or 0.3% to US$56.20 a barrel. Over the week Brent rose 1.6% and Nymex rose 1.0%.

Major currencies were weaker against the US dollar in US and European trade compared with the end of Asian trade. The Euro fell from near US$1.1150 to US$1.1110 and was near US$1.1125 in late US trade. The Aussie dollar fell from near US69.45 cents to US69.00 cents and was near US69.10 cents in late US trade. The Japanese yen held between 108.58 yen per US dollar and JPY108.79 and was near JPY108.66 in late US trade.

Base metal prices were mixed on the London Metal Exchange on Friday. Nickel rose 0.2% and zinc rose 0.5%. But other metals fell by 0.8-3.2% with lead down the most. Over the week zinc rose 1.4% and lead rose 0.6% but other metals lost up to 4.2% with nickel down the most.

The gold futures price rose by US$4.60 or 0.3% to US$1,419.30 an ounce. The spot gold price was trading near US$1,418 an ounce in late US trade. Over the week gold lost US$7.40 or 0.5%. Iron ore rose by US$1.75 or 1.5% to US$118.75 a tonne. Over the week iron ore fell US$3.10 or 2.5%.

G’day Australia

In Australia, the CommSec State of the States report is released. In the US, the Dallas Federal Reserve manufacturing index is released.

 

Australia: Inflation in focus

Friday, July 26, 2019

On Monday

The week kicks off on Monday when CommSec releases the quarterly State of the States report, a report monitoring the performance of our State and Territory economies.

On Tuesday

On Tuesday the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Consumers are generally feeling OK about the state of their finances and the state of the economy. Also, on Tuesday, the ABS released the June data on building approvals – the approvals granted by local councils to build new houses and apartments. Home building is easing in most states and territories following record home building over 2018.

On Wednesday

On Wednesday, Australia’s main inflation measure – the Consumer Price Index (CPI) – is slated for release. The June quarter data is expected to show prices rising by 0.6%, lifting the annual rate of inflation from 1.3% to 1.6%. One of the main drivers of the CPI result is the cost of petrol. Petrol rose by 11% in the quarter, adding around 0.3-0.4% points to the quarterly CPI increase. In the June quarter, seasonal increases will be recorded for health (private health insurance) and tobacco (excise flowthrough) while seasonal decreases in domestic travel and accommodation prices are expected. Stripping out volatile elements like petrol (trimmed mean measure), prices probably rose 0.4% in the quarter and 1.6% over the year.

On Thursday

On Thursday the ABS release the June quarter international price indexes (export and import prices). Also, both AiGroup and the Commonwealth Bank release separate survey results for manufacturing purchasing managers. And CoreLogic releases July data on home prices. So far in July the 5-capital city aggregate measure of home prices is flat. Sydney and Melbourne prices have lifted 0.1% with Brisbane prices up 0.2% and Adelaide and Perth prices down 0.3%.

On Friday

And on Friday the ABS release the June quarter producer price indexes and June figures on retail trade. The producer price indexes will be affected by the 20 per cent lift in iron ore prices, 11 per cent rise in oil prices and the small fall in the value of the Aussie dollar.

Overseas: US Federal Reserve set to cut rates

In the US, the two stand-out events in the coming week are the Federal Reserve rates decision and the employment report (non-farm payrolls). In China, the focus is on the surveys of purchasing managers.

On Monday

The week begins on Monday in the US, when the Dallas Federal Reserve manufacturing index is issued.

On Tuesday

On Tuesday, the personal income and spending data is released with pending home sales, consumer confidence, the S&P/Case Shiller home price index and the regular weekly data on chain store sales. The personal income data includes pivotal inflation data – the core personal consumption expenditure deflator – the measure tracked by the Federal Reserve. The core PCE deflator may have lifted 0.2% in June to stay 1.6% higher on the year.

On Wednesday

On Wednesday, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. The ADP measure of private sector payrolls is also slated for release on Wednesday together with the employment cost index and the Chicago purchasing managers index. In China on Wednesday the “official” manufacturing and services sector surveys of purchasing managers are issued by the National Bureau of Statistics. The private sector Caixin purchasing managers’ survey for manufacturing is released on Thursday.

On Thursday

On Thursday in the US, the weekly figures on new claims for US unemployment insurance are issued, along with the ISM manufacturing survey, construction spending figures and data on new vehicle sales. 

On Friday

On Friday in the US, the pivotal monthly employment report is released, containing data on non-farm payrolls (employment), average hourly earnings and the unemployment rate. Economists expect a healthy 160,000 lift in jobs in July. US data on consumer sentiment, international trade and factory orders are also issued on Friday.

 

Australia: Mid-winter lull

Friday, July 19, 2019

The mid-winter lull in economic data continues in Australia. Skilled internet job vacancies figures are issued. The Commonwealth Bank releases its measure of economy-wide spending along with the ‘flash’ purchasing manager indexes. The gauges provide a health check on factory and services activity. Reserve Bank Governor Philip Lowe speaks at the annual Anika Foundation luncheon.

On Monday

The week kicks off on Monday when the Commonwealth Bank issues its Business Sales Index for June.

On Tuesday

On Tuesday the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Also, on Tuesday, the Reserve Bank’s Assistant Governor Christopher Kent, Assistant Governor (Financial Markets), provides a speech “The Committed Liquidity Facility” at The Bloomberg Address, Sydney at 8.30am AEST.

On Wednesday

On Wednesday, the Commonwealth Bank’s ‘flash’ services and manufacturing gauges for July are issued. Manufacturing and services sector activity expanded in June. Also, on Wednesday, the Department of Employment releases the Internet Vacancy Index for June. In trend terms, the Internet Vacancy Index (IVI) fell by 0.7% - the fifth consecutive monthly decline - to 81.1 points in May. The index is 5.7 % lower than a year ago – the biggest annual decline since December 2013. 

On Thursday

On Thursday, Reserve Bank Governor rounds-out the week with his annual speech at the The Anika Foundation Luncheon in Sydney at 1.05pm AEST. And the Bureau of Statistics issues detailed labour market data for June.

Overseas: US economic growth data in focus

In the US, economic growth, housing and manufacturing data are amongst the highlights in the coming week. Durable goods orders data - a key measure of business investment - will also be closely scrutinised by economists for signs that companies haven’t frozen spending amid signs of a slowing US economy.

On Monday

The week begins on Monday in the US, when the influential Chicago Fed National Activity Index is issued.

On Tuesday

On Tuesday, the regular weekly reading on US chain store sales is scheduled, along with house prices, existing home sales and factory data from the Richmond Federal Reserve. Sales of previously owned homes rebounded in May to a 3-month high as all US regions gained amid lower mortgage rates and a still-supportive jobs market.

On Wednesday

On Wednesday, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. New home sales declined sharply in May, led lower by a 35.9% plunge in sales in the West – the least affordable of the four major US regions. Also, on Wednesday, ‘flash’ IHS Markit purchasing managers’ manufacturing indexes are released for major developed economies, including the US, UK, Eurozone and Japan. Factory activity is contracting globally.

On Thursday

On Thursday, the weekly figures on new claims for US unemployment insurance are issued, along with durable goods orders, wholesale inventories and factory activity data from the Kansas City Federal Reserve. Durable goods are expected to lift by 0.9% in June after declining by 1.3% in May. It was the third fall in orders in four months, held down by Boeing’s struggles with its suspended 737 Max jet. Also, on Thursday, the goods trade balance is issued for June. Economists are forecasting a deficit of US$72.3 billion. The US merchandise-trade deficit widened in May to a five-month high amid a surge in imports following President Donald Trump’s decision to increase levies on US$200 billion worth of items from China. 

On Friday

On Friday, June quarter US economic (GDP) growth data is issued. Annual GDP growth is forecast to decelerate from 3.1% in the March quarter to 1.7% in the June quarter. US Federal Reserve Chair Jerome Powell recently said that “crosscurrents”, such as trade tensions and concerns about global growth, have been weighing on US economic activity and the outlook.

On Saturday

On Saturday in China, industrial profits data for June is scheduled.

US earnings season

The US profit reporting (earnings) season continues in the coming week. S&P 500 companies are expected to report a 3 per cent fall in second quarter earnings growth according to FactSet data.

Amongst companies reporting on Monday: Crane, Halliburton, Moelis, TD Ameritrade, Veritex, Whirlpool.

Tuesday: 3M, Allegheny Technologies, Biogen, Corning, Harley-Davidson, Kimberly-Clark, Lockheed Martin, McDonald’s, Snap, Verizon Communications, Xerox

Wednesday: Advanced Micro Devices, AllianceBernstein, AT&T, Boeing, Callaway Golf, Caterpillar, Ford, FreeportMcMoRan, Hilton, Legg Mason, Tesla, Visa.

Thursday: Alphabet, Amazon.com, American Airlines, Century Aluminium, Chipotle, ConcoPhillips, Expedia, Mattel.

Friday: Cabot Oil & Gas, Colgate-Palmolive, Goodyear, Moody’s, Phillips 66, Piper Jaffray, Twitter, Weyerhaeuser.

 

Good morning, Australia

Monday, July 15, 2019

How’dy USA

In US data, the producer price index (PPI) rose by 0.1% (consensus: flat) in June to 1.7% (consensus: 1.6%) in the year.

US share markets rose to record highs on Friday. The S&P 500 index closed above the 3,000 point level for the first time. Shares of Dow Inc. led the Dow Jones index higher, rising 4.0%. Shares of Caterpillar (+3.3%) and Intel (+2.7%) also led gains. JB Hunt Transport Services was the best-performing stock in the S&P 500, up by 5.9%. The Dow Jones closed up by almost 244 points or 0.9%. The S&P500 was up by 0.5% and the Nasdaq rose by 48 points or 0.6%. For the week, the Dow Jones added 1.5%, the S&P 500 rose 0.8% and the Nasdaq gained 1.0%.

Shorter-dated US treasuries rose (yields lower) on Friday. But treasury yields were largely unmoved by stronger-than expected producer price data as market expectations of an interest rate cut this month held firm. US 2-year yields fell by 1 point to near 1.85% and US 10-year yields were flat near 2.12%.

Major currencies were stronger against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from lows near US$1.1238 to highs near US$1.1273 and was near US$1.1269 in late US trade. The Aussie dollar rose from lows near US69.82 cents to highs near US70.24 cents and was near US70.14 cents in late US trade. The Japanese yen strengthened from near 108.46 yen per US dollar to JPY107.80 and was near JPY107.87 in late US trade.

Bonjour Europe

European share markets were little changed on Friday. The pan European STOXX600 ended trading flat but was down 0.8% over the week. The German Dax and the UK FTSE indexes were both down by just 0.1%. Daimler shares fell by 0.7% after the world's largest truck maker warned investors it expected to report a second quarter loss. In London trade, shares of Rio Tinto fell by 0.3%, but BHP shares lifted by 0.4%.

Hello World!

In China data, exports fell by 1.3%/yr. (consensus: -1.4%) and imports were down by 7.3%/yr. (consensus: -4.6%) in June. Chinese banks offered 1.66 trillion yuan (consensus: 1.7 trillion yuan) in net new loans in June, up from 1.18 trillion yuan in May.

Major currencies were stronger against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from lows near US$1.1238 to highs near US$1.1273 and was near US$1.1269 in late US trade. The Aussie dollar rose from lows near US69.82 cents to highs near US70.24 cents and was near US70.14 cents in late US trade. The Japanese yen strengthened from near 108.46 yen per US dollar to JPY107.80 and was near JPY107.87 in late US trade.

Global oil prices were little changed on Friday. Worries about a global crude surplus offset concerns over supply cuts in the US Gulf of Mexico due to Tropical Storm Barry. Global crude oil supply exceeded demand by 900,000 barrels a day in the first six months of 2019 according to the IEA. The Brent crude price rose by US20 cents or 0.3% to US$66.72 a barrel. The US Nymex price rose by US1 cent or 0.02% to US$60.21 a barrel. Over the week, Brent rose by 3.9% and the Nymex lifted 4.7%.

Base metal prices were mixed on the London Metal Exchange (LME) on Friday. Nickel (+2.6%) rose on concerns that Indonesia will resume an export ban on ore in 2022. Tin fell by 0.7%, while copper and aluminium were both down by 0.3%.

The gold futures price rose by US$5.50 an ounce or 0.4% to US$1,412.20 an ounce to be up 0.9% over the week. The spot gold price was trading near US$1,415 an ounce in late US trade. Iron ore fell by US70 cents or 0.6% to US$118.55 a tonne but was still up by 3.8% over the week.

G’day Australia

In China, June quarter economic (GDP) growth and June monthly activity data are all issued. In the US, the New York Empire State Manufacturing Index is scheduled.

 

Australia: Jobs data dominates

Friday, July 12, 2019

In the coming week there is little in the way of top-tier economic data. But the all-important June employment report will hog the headlines towards the end of the week. Before this, the minutes of the Reserve Bank’s July 2 Board meeting - where interest rates were cut for a second successive month - are issued on Tuesday.

On Tuesday

The week kicks off on Tuesday when the weekly series of consumer confidence will be released from Roy Morgan and ANZ. Consumers have been given a ‘shot in the arm’ by income tax and mortgage rate cuts, boosting their potential purchasing power.

Also, on Tuesday, the Reserve Bank Board’s July 2 monetary policy meeting minutes will be closely observed. At that meeting the cash rate was cut by 25 basis points to a record low 1%. It was the first back-to-back rate cut since mid2012. But Reserve Bank Governor Philip Lowe has since signalled that he may sit pat in the near term, choosing to “closely monitor how things evolve over the coming months”. While developments in the labour market remain the Bank’s key focus, the June quarter update on inflation looms large at month-end.

On Wednesday

On Wednesday, Westpac and the Melbourne Institute releases the Leading Index for June. The May reading of -0.1% implies a continuation of sub-trend economic growth into the second half of 2019.

On Thursday

On Thursday the NAB releases the June quarter survey of business confidence and conditions. Also, on Thursday, the employment report for June is issued. Both the unemployment and underemployment rates have ticked up in recent months. And leading indicators of jobs growth have weakened. The participation rate has hit record highs.

The Reserve Bank has cited spare capacity in the labour market for successive quarter per cent rate cuts in June and July. Commonwealth Bank economists have forecast 5,000 jobs to have been created in June with the unemployment rate stuck at 5.2% for a third consecutive month – above the Reserve Bank’s 4.5% “full employment” target.

Overseas: China economic growth data in focus

Chinese economic growth and activity data are amongst the highlights in the coming week. In the US, retail spending and the Federal Reserve’s Beige Book will be keenly observed ahead of the next interest rate decision.

On Monday

The week begins on Monday in China with economic growth data for the June quarter. The economy grew at a 6.4% annual pace in the December quarter, the slowest growth rate since March 2009. And growth is expected to slow even further to around 6.3% after the hike in US tariffs on US$200 billion worth of Chinese goods and services in May weighed heavily on China’s factories and the export sector. In addition, Chinese retail sales is tipped to have grown at an 8.5% annual pace in June with production up 5.3% and investment up 5.6%. Home prices are tipped to grow by around 11% over the year.

On Monday in the US, the influential New York Federal Reserve Empire State Manufacturing Index is issued.

On Tuesday

On Tuesday, the regular weekly reading on US chain store sales is due, along with retail sales, trade prices, industrial production, capacity utilisation, business inventories and homebuilder sentiment data. Retail spending is tipped to lift by 0.2% - the fourth successive monthly gain - after a solid 0.5% jump in May.

On Wednesday

On Wednesday, the weekly mortgage applications figures from the US Mortgage Bankers Association are due. The June readings on housing starts and building permits are issued. The US Federal Reserve’s Beige Book will be scrutinised for an expected improvement in the economic outlook across districts after trade tensions between the US and China receded at the G20 Summit in Osaka, Japan. But modest growth is expected later this year.

On Thursday

On Thursday, the weekly figures on new claims for US unemployment insurance are issued, along with factory data from the Philadelphia Federal Reserve. The Conference Board’s Leading Index is also issued. The index was unchanged in May – the first month without an increase since January.  

On Friday

On Friday, the University of Michigan releases its preliminary July estimate of consumer sentiment.

US earnings season

The US profit reporting (earnings) season gets into full swing in the coming week. S&P 500 companies are expected to report a 2.5% fall in second quarter earnings growth according to Bloomberg data.

On Monday

Amongst companies reporting on Monday: Charles Schwab, iHealthcare, JB Hunt Transport, QBioMed.

On Tuesday

Tuesday: BlackRock, Domino’s Pizza, Goldman Sachs, Johnson & Johnson, JPMorgan Chase, Morgan Stanley, Netflix, United Airlines, UnitedHealth, Wells Fargo.

On Wednesday

Wednesday: Alcoa, Bank of America, IBM, Kaiser Aluminium, Steel Dynamics, Texas Instruments, United Rentals.

On Thursday

Thursday: AMEX, Bank of New York Mellon, Microsoft, PayPal, Philip Morris, Skyworks Solutions, Snap-on, Travelers.

On Friday

Friday: Cleveland-Cliffs, E*Trade, eBay, Honeywell, Schlumberger, State Street.

 

MORE ARTICLES

Good morning, Australia

Australia: Post-election results

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia

Australia: Interest rates & economic growth

Good morning, Australia

Australia: Business investment and credit growth data in focus

Jobs data: Something for everyone

Good morning, Australia

Australia: Wage and jobs data in focus before Election Day

Good morning, Australia

Good morning, Australia

Australia: Inflation data in focus

Good morning, Australia

Australia: Reserve Bank and jobs data ahead of Easter holidays

Good Morning, Australia

Australia: Reserve Bank and consumer confidence in focus

Good Morning, Australia

Job market in good shape

Good Morning, Australia

Quiet week with focus on ‘second tier’ data

Good morning, Australia

Good morning, Australia!

Good morning, Australia!

Good morning, Australia!

Slowdown in key events next week

Good Morning, Australia

Good Morning, Australia

Thinking about growth

Good Morning, Australia

Good morning, Australia

A mixed bag of data and events next week!

Good morning, Australia

Good morning, Australia!

Good morning, Australia

Good morning, Australia!

Aussie jobs data in focus

Good morning, Australia

Good morning, Australia

Good morning, Australia

Good morning, Australia!

Good morning, Australia!

Wind down to Christmas begins…

Good morning, Australia!

Good morning, Australia!

Summer signposts for investors

Good morning, Australia!

Good morning, Australia!

A good set of numbers

Good morning, Australia!

Spotlight on our job market

Good morning, Australia!

Mate against mate. State against state

Good morning, Australia!

The week kicks off …

Spending is slowing

Days of our lives

Friday I have Monday on my mind

Tassie baby boom & baby boomers working more

Things are looking good

What’s ahead for Oz and the world economy next week?

Investor Signposts: Are wages on the rise?

Investor signposts: RBA dominates the agenda

Investor signposts: Which state will come out on top?

Will consumer and business prices lift?

The week ahead: Money for nothing

The week ahead: All eyes on China

The week ahead: New beginnings

The week ahead: End of Financial Year lull?

The week ahead: Australian arrivals and departures

The week ahead: The US Fed takes centre stage

The week ahead: Winter is here

The week ahead: Heavyweight US economic growth

The week ahead: Consumer confidence and US housing

The week ahead: Wage Price Index and China's activity

The Week Ahead: The Budget and Inflation

The week ahead: Reserve Bank in focus and US Fed meets

The week ahead: Inflation and US economic growth

The week ahead: Can the Aussie labor market continue its record-breaking run?

The week ahead: Economic indicators and inflation data

The week ahead: Aus job market and US inflation

The week ahead: Jobs growth and US Fed expected to lift interest rates

The week ahead: lending data and US inflation

The week ahead: The Reserve Bank, US jobs and Chinese inflation data

The week ahead: Spotlight on the US Fed Reserve Chair

The week ahead: Wages growth and US Federal Reserve

The week ahead: Reporting season week 2

What's on: Reporting season and inflation

The week ahead: Inflation data in focus and US Fed meetup

Business sales, job vacancies and US economic growth

Housing and employment data to dominate

Investor signposts

Investor signposts

Investor signposts: Reserve Bank and economic growth

Housing and capital spending dominate last week of month

Investor signposts: Reserve Bank dominates proceedings