By Craig James

If it wasn’t for the employment data next week, the economic diary in Australia would be relatively empty. But the importance of the employment data cannot be overstated in the context of the upcoming November Reserve Bank Board meeting. On the global front, the focus is on the Chinese economic growth figures due on Wednesday. In the US, housing and inflation data will take centre stage.

The week kicks off in Australia on Tuesday, when the RBA releases minutes of the Board meeting held a fortnight earlier. The Reserve Bank Board may have left interest rates unchanged for the second consecutive month, but there were more changes made to the accompanying statement. So, investors are probably hoping that the new Reserve Bank Governor, Philip Lowe, is more forthcoming in providing additional detail on policy discussions.

Also on Tuesday, the Australian Bureau of Statistics (ABS) will recast the industry vehicle sales data, providing seasonally adjusted and trend estimates, while Roy Morgan and ANZ will release the weekly consumer sentiment survey. Households remain relatively upbeat and healthy confidence levels should bode well for retailers.

In addition on Tuesday, the Reserve Bank Governor Philip Lowe will deliver a speech at Citi's 8th Annual Australian & New Zealand Investment Conference in Sydney (8:10am AEDT). Given it will be his second public address as Governor, it will be closely dissected by investors, traders and financial analysts.

Employment data in focus

On Thursday, the ABS will release the September employment data.

In recent months, unemployment has been ticking modestly lower. In fact, the jobless rate hit a 3-year low of 5.63% in August.

We tip job growth of around 15,000 in the month and the jobless rate to lift modestly to 5.7%. A soft employment result, and a super-low inflation outcome at the end of October, could open the door for a November rate cut.

However, the anecdotal evidence suggests spending is lifting across the economy, and coupled with the lift in job vacancies, should result in a lift in hiring in coming months.

Overseas: Chinese economic growth to dominate attention

There are healthy helpings of ‘top shelf’ economic data – both in China and the US – in the coming week, with a number of speeches by US Federal Reserve Presidents thrown in for good measure.

In the US, the week kicks off on Monday with the release of New York Manufacturing index, US industrial production and capacity utilisation.

On Tuesday, the US consumer price index (CPI) is issued alongside the NAHB housing market index. The “core” reading of consumer prices (excludes food and energy) may have risen just 0.2% in September to stand 2.2% higher over the year. And while the Federal Reserve focuses on the core personal spending deflator (which excludes food and energy), a modest lift in inflation will continue to keep the discussion open on a December rate hike. The weekly data on chain store sales is also released on Tuesday.

On Wednesday, there are three ‘top shelf’ indicators – US housing starts, building permits and the Federal Reserve Beige book. An encouraging 2.5% lift in housing starts is tipped, while building permits may have edged higher by 1.1% in September after falling by 0.4% in August.

Also on Wednesday, Chinese economic growth data is issued with the usual monthly readings on retail sales, production and investment. The Chinese economy expanded at a 6.7% annual pace in the June quarter. Predictably, growth will ease further in coming years to reflect maturation of the economy’s development. In terms of the other activity indicators, retail sales should have continued its run of double-digit annual growth.

On Thursday, existing home sales, the leading index, the Philadelphia Federal Reserve Business Outlook survey and the usual weekly data on new claims for unemployment insurance (jobless claims) are all slated for release. Overall, flat to softer results are expected.

Share market, interest rates, currencies and commodities

The US earnings season has begun and marks the time when US listed companies release their latest revenue and profit figures. And yet again, analysts are telling investors to brace for weakness. According to the S&P Global Market Intelligence unit, analyst forecasts suggest a 1% annual decline in S&P 500 third quarter earnings – marking the fifth straight quarter of sliding earnings.

Once again, the energy sector is expected to lead the declines, with losses also forecast for real estate and industrial stocks. On the flip-side, materials and financials are expected to see more upbeat results.

Among those companies reporting on Monday is Bank of America, IBM, Netflix, and Hasbro. While on Tuesday, Johnson & Johnson, Goldman Sachs, Yahoo!, Blackrock, Domino’s Pizza and Intel all issue profit results.

On Wednesday, no less than 100 companies are expected to release earnings including Morgan Stanley, EBay, American Express, Halliburton and Las Vegas Sands. On Thursday, Verizon, Microsoft, and PayPal are slated to report their earnings results. And on Friday, General Electric, McDonalds and Honeywell will report.

This week's Investor Signposts was written by CommSec economist, Savanth Sebastian

This report is approved and distributed in Australia by Commonwealth Securities Limited ABN 60 067 254 399, AFSL 238814 (CommSec) a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124, AFSL 234945 (the Bank). The Bank and its subsidiaries have effected or may effect transactions for their own account in any investments or related investments referred to in this report. This report is not a recommendation to buy, sell or hold any securities, property, real estate or financial products, and has been prepared without taking account of the objectives, financial or taxation situation or needs of any particular individual. For this reason, any individual should, before acting on the information in this report, consider the appropriateness of the information, having regard to the individual's objectives, financial or taxation situation and needs and, if necessary, seek appropriate professional advice. Past performance is not a reliable indicator of future performance. This report is produced by Commonwealth Research based on information available at the time of publishing. We believe that the information in this correspondence is correct and any opinions, conclusions or recommendations are reasonably held or made as at the time of its compilation, but no warranty is made as to accuracy, reliability or completeness. To the extent permitted by law, neither the Bank nor any of its subsidiaries accept liability to any person for loss or damage arising from the use of this report.