Data, data, data

A bevy of key indicators are generally released at the start of each month and November is no exception. Around half a dozen indicators are released in Australia in addition to key speeches, reports and an interest rate decision from the Reserve Bank.

The week kicks off in Australia on Monday with key home loan figures from Core Logic/RP Data together with the Performance of Manufacturing index and data on building approvals from the Australian Bureau of Statistics (ABS).

On Tuesday the Reserve Bank meets to decide interest rate settings. And for the first time in six months, a decision to cut rates is being seriously entertained.

Major banks have been forced to recoup some of the cost of raising additional capital by lifting interest rates. If the Reserve Bank determines that this could harm the economy, then it will cut rates. But this is by no means certain. Around 80 per cent of existing home loan customers are ahead with their loan repayments, in effect watering down the negative impact of the recent rate increases on the broader economy. And the Reserve Bank won’t be too disappointed with less irrational exuberance in Sydney and Melbourne home markets.

But on the other side of the equation, the economy is increasingly dependent on housing to maintain growth and there clearly hasn’t been a housing boom outside the key Sydney and Melbourne markets.

On Wednesday the ABS releases September figures for both international trade (exports and imports) and retail trade (spending).

On Thursday the Reserve Bank Governor, Glenn Stevens, delivers a speech to the Melbourne Institute 2015 Economic and Social Outlook Conference in Melbourne. Investors are looking for clarity on a number of fronts at present, so the speech will be keenly awaited.

The speech by Glenn Stevens is at 9.15am. And at 12pm on the same day there will be panel participation by Philip Lowe, Deputy Governor, at FINSIA's Regulators Panel Discussion in Sydney.

And on Friday the Reserve Bank will issue its quarterly Statement on Monetary Policy. By the time this comes around there may be less interest – explanations for the rate decision coming from Reserve Bank officials on Thursday. But the latest forecasts on economic growth and inflation will be produced and that will indicate whether there is any monetary policy leaning – implicit or otherwise.

Plenty to monitor on overseas markets

There are ‘top shelf’ indicators to watch in both China and the United States over the coming week. The highlight is likely to be the employment report (non-farm payrolls) in the US on Friday.

The week kicks off on Sunday (November 1) in China when the official statistician (National Bureau of Statistics) releases the purchasing manager indexes for both manufacturing and the services sectors. The data is effectively ancient history following stimulus measures employed by the central bank.

On Monday, the private sector variant of China’s manufacturing purchasing manager’s index – from Caixin – will be issued. And on Wednesday Caixin will issue its services purchasing managers index.

In the US, the week kicks off on Monday with the release of the ISM manufacturing index. Economists expect that the index eased from 50.2 to 49.7. Interesting the final reading of the competing Markit purchasing managers index for October is also issued and the preliminary reading was a lot higher than the ISM index at 54.0.

Also released on Monday in the US is data on construction spending.

On Tuesday, the ISM survey for the New York region is issued together with data on new vehicle sales and factory orders. Economists expect that sales fell from a 17.17 million annual rate to 17.6 million in October. Also on Tuesday is the usual weekly data on chain store sales. 

On Wednesday the ADP survey of private sector employment is issued with international trade data (exports and imports) and the ISM services report. Private sector jobs are tipped to have lifted by 172,000 in October, down from the 200,000 gain in September. The trade deficit may have narrowed from US$48.4 billion to US$46 billion. The services gauge may have lifted from 56.9 to 57.2. And also on Wednesday the usual weekly report on mortgage transactions – purchases and refinancing – is scheduled.

Also on Thursday in the US weekly data on claims for unemployment insurance is issued together with the Challenger job layoffs series and preliminary data on both labour costs and productivity.

And on Friday the highlight of the week – the non-farm payrolls or employment report is released. In September, job growth disappointed, only lifting by 142,000. Economists tip a stronger result in October with jobs up 189,000. The unemployment rate is tipped to be steady at 5.1 per cent while earnings may have lifted by 0.3 per cent. 

Stronger-than-expected results – particularly on earnings (wages) and the jobless rate would boost chances of a December rate hike.