By Craig James

The cupboard is largely bare in terms of key domestic economic indicators or events until January 3. Still, the Federal Government will release its Mid-year estimates of the Budget position on Monday. On Tuesday, the Reserve Bank Board minutes are released, while private sector credit figures are released on New Year’s Eve.

The Reserve Bank minutes is unlikely to surprise. Policymakers are pretty much talked out when it comes to 2016. The Reserve Bank remains optimistic about the medium-term prospects for the economy, and no doubt, the lift in commodity prices would give them further confidence. 

In terms of private sector credit, lending probably advanced by 0.5% in November, lifting the annual growth rate from 5.3% to 5.4%. While housing remains the core driver of lending the lift in business borrowings is encouraging.

In contrast to Australia, there are still plenty of indicators to watch in the US, focussing on consumer spending, consumer confidence and the housing market. But also, the influential regional manufacturing surveys are released over the next couple of weeks and will feed into the ISM manufacturing gauge released in the New Year. 

Overall, US economists are forecasting modest improvements in indicators to be released over the coming fortnight. The final reading on September quarter economic growth should confirm that the US recovery is on track, supporting the decision by the Federal Reserve to lift interest rates for only the second time in almost a decade. Similarly, house price growth remains healthy, while activity and new construction in the sector remains strong. It’s clear the the US economy is in good shape, with firm economic growth and low unemployment. No doubt the focus in the New Year will be on the discussion around further US interest rate hikes.

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.