By Craig James

Another big week of economic events is in prospect in Australia and overseas. In Australia, the focus will be on the labour market. In China, trade, inflation, and broader economic activity indicators are released throughout the week. In the US, data on retail sales and consumer prices are the highlights.

In Australia, the week kicks off on Monday with data on housing finance slated for release. The data could still be classified as somewhat old news, given that it is for the month of May – when the Reserve Bank cut the cash rate. However more importantly, the rate cut would not have filtered through to mortgage rates till late May. It is likely housing activity will receive a further boost in coming months. For the record, based on data from the Bankers Association, we expect that loans for owner occupation (loans for people wanting to live in homes) fell by 2.7% in May. And the total value of loans (owner-occupier and investment) was probably flat in May after falling by 1.8% in April.

On Tuesday, the National Australia Bank business survey is released alongside the Reserve Bank data on credit and debit card lending. The business survey covers key business indicators, a reading on business confidence as well as gauges on prices, wages and finance. The indicators of confidence and conditions have showed encouraging improvement since the Budget, with a particular focus on a lift in profitability. However, given the uncertainty of the Federal election result and likelihood of a minority government, it is likely to drift lower.

Also on Tuesday, ANZ and Roy Morgan release the weekly consumer sentiment survey, while the Reserve Bank Head of Financial Stability Luci Ellis delivers a speech at the Sydney Banking and Financial Stability Conference at the University of Sydney.

On Wednesday, the monthly Westpac consumer confidence index is released. The weekly survey has shown that households were in a happy place, with confidence levels holding a couple of points below recent 2½-year highs. However, it is likely that both readings will drift lower, given the uncertainty surrounding the latest Federal election result.

Also on Wednesday, the Bureau of Statistics (ABS) will release lending finance figures – including housing, personal, business and lease loans. The April lending statistics showed a modest 1.4% fall to $70.8 billion – easing further away from the 7½-year high ($75.1 billion) in September last year.

On Thursday, the ABS releases the monthly employment figures. Figures have been somewhat patchy in recent months with the job market seemingly pausing for breath after out-sized increases in late 2015. The focus will be on the shift between full-time and part-time employment, with the latter gaining ascendancy in the past few months. Overall, we expect that the number of jobs rose by around 5,000 in June. And while the participation rate may have held steady at 64.8%, it is unlikely to stop the unemployment rate lifting modestly from 5.7% to 5.8%.

Spotlight on US and Chinese data

So-called ‘top shelf’ economic indicators are released in China in the coming week. And in the US, the focus will be on retail sales and consumer price data released on Friday.

China will actually kick off proceedings over the week with the release of inflation data on Sunday. Similar to what has been seen across the globe, inflation in China remains benign. In fact, producer prices (business inflation) continues to suggest a deflationary environment, down 2.8% over the year.

In the US on Monday, the National Federation of Independent Business releases its Business Optimism index, alongside the JOLTS survey of job openings.

On Tuesday, data on wholesale inventories and sales are slated for release.

On Wednesday, the usual weekly data on home purchase and refinancing is issued, alongside the monthly budget statement and import price index. Also on Wednesday, the US Federal Reserve releases the Beige Book - this indicator is a ‘qualitative’ survey of economic conditions across 12 Fed districts - released ahead of Federal Reserve interest rate decisions.

On Thursday, the weekly figures on claims for unemployment insurance are released together with the June data on producer prices. The producer price index (business inflation) is expected to remain tame. Analysts expect a 0.1% rise in the “core” rate (excludes food and energy).

And we have to wait till Friday for the key ‘top shelf’ indicators for the week – namely retail sales and consumer prices. Economists tip a solid 0.2% increase in June retail sales after the 0.5% lift in May. No doubt fluctuating petrol prices are having a significant influence on the results. Encouragingly, core sales (sales less autos and gasoline) are expected to have lifted by 0.4% in June.

The consumer price index is tipped to lift by just 0.3% in June. Excluding food and energy prices, is expected to rise by only 0.2%. Clearly inflation remains well contained and should ensure no rush by the Federal Reserve to lift rates.

Also on Friday, data on business inventories is issued alongside industrial production and the University of Michigan confidence reading.

In China on Friday, key ‘top shelf’ indicators are also issued, namely retail sales, production and investment. Annual growth rates are slowing, but that is ‘normal’ for a maturing economy. Also trade, lending and money supply data is between Sunday and Wednesday.