By Craig James

The week kicks off on Tuesday when the Reserve Bank releases minutes of the last Board meeting – that is, the Bank releases details about what the Board members discussed. And the commentary could prove interesting given that at the July meeting Board members changed their views on the currency. Before the July meeting, members believed that further depreciation of the Australian dollar was “likely and necessary”. But at the latest meeting those key few words were omitted. Essentially the Reserve Bank board members seemed to suggest that they were happy about where the Aussie dollar had
settled, that is, around US73-74 cents.

Other areas of interest in the Board minutes include the discussion about the new “speed limit” for the economy and the implications that this poses for retail spending, home building and the job market. 

Also on Tuesday the Australian Bureau of Statistics (ABS) releases data on new car sales while ANZ and Roy Morgan release the weekly consumer confidence survey. 

The industry group – the Federal Chamber of Automotive Industries – has already released new vehicle sales figures in original terms. That is, the data hasn’t been adjusted for seasonal effects. In July, new vehicle sales were at record highs for any July month. This shouldn’t be a surprise given the fact that car affordability is at the best levels in almost 40 years. The ABS will recast these sales figures and express them in seasonally adjusted and trend terms. 

The consumer confidence figures are unlikely to provide many surprises. Confidence amongst consumers is reasonable at present with fewer global “flashpoints” and recent comments by the Reserve Bank that the job market should prove stable over the next year. The main worry for consumers is that they would like a stronger Aussie dollar to boost their purchasing power over foreign goods and give them greater scope to travel abroad.

On Wednesday, the Skilled Vacancies index is released from the Department of Employment. The data provides another perspective on the state of the job market. 

China and the US trade places 

The week kicks off on Monday with the release of the New York Federal Reserve manufacturing index, the housing market activity index from the National Association of Home Builders and data on capital flows. 

The New York Fed index is tipped to lift from 3.86 to 4.6; and the NAHB housing market index is tipped to have remained stable at a reading of 60. 

On Tuesday, data on housing starts and building permits are slated for release together with the usual weekly chain store sales figures. The building permits data is the leading gauge on home building. Economists expect that permits fell by 10% in July. But housing starts may have remained stable at a 1.17 million annual rate in the month. 

On Wednesday, the July consumer price index (CPI) is issued. Federal Reserve policymakers would prefer to see some evidence that inflationary pressures are picking up before they decide to lift interest rates. Economists expect that the core CPI (excludes food and energy) lifted 0.2% in July, taking the annual rate to 1.9% in the month from 1.8%. 

Also on Wednesday, the Federal Reserve releases minutes of the last policy-making meeting. Economists are trying to divine whether the Fed starts lifting rates in September or whether policy-makers wait until December. So analysts will be scouring for clues from the latest meeting transcript. The weekly reading of housing finance is also issued on Wednesday. 

On Thursday the leading index is released together with data on existing home sales, the pivotal Philadelphia Federal Reserve business survey and the regular weekly data on claims for unemployment insurance. 

Economists expect that existing home sales eased 1.3% in July to a 5.42 million annual rate. Analysts are also tipping a modest 0.2% lift in the leading index in July and a lift in the Philly Fed index from 5.7 to 6.2 in August. 

Sharemarket, interest rates, currencies and commodities

The Australian profit-reporting season moves into top gear in coming week. So far there have been the usual fair share of stand-outs and disappointments, but companies continue to rack up the profits with balance sheets generally in strong shape. 

On Monday, earnings results include Newcrest Mining, Aurizon, Charter Hall Retail and Flexigroup. 

On Tuesday, earnings are scheduled from QBE Insurance Group Ltd, Iluka Resources, Sonic Healthcare, GPT
Group, Challenger, Sydney Airport, Invocare and Asciano. 

On Wednesday, amongst those scheduled to issue their profit results are Woodside Petroleum, Stockland, iiNET, Alumina, Treasury Wine Estates, Recall Holdings and Seven West Media. 

On Thursday, earnings are expected from Origin Energy, APN News & Media, Qantas, ASX, Western Areas, IRESS, AMP, Wesfarmers, Tatts Group, Adelaide Brighton, Qube, Lifestyle Communities, Mount Gibson Iron, Investa Office Fund, NRW Holdings and RCR Tomlinson. 

On Friday, scheduled earnings results include those from Medibank Private, Coca-Cola Amatil, DUET Group, Insurance Australia and Santos.