By Craig James

In Australia, the week begins on Monday when Christopher Kent, Assistant Governor (Economic) at the Reserve Bank delivers a speech at the Australian National University
in Canberra. No topic has been set for the speech as yet.

On Tuesday, the weekly ANZ Roy Morgan consumer confidence is released. The Reserve Bank Governor has described the current mood as “determined pessimism”.

Also on Tuesday, the Reserve Bank releases minutes of the Board meeting held on June 2. The Board hasn’t provided any guidance on future interest rate moves, so investors will be screening the minutes for clues.
On Tuesday, Guy Debelle, Assistant Governor (Financial Markets) at the Reserve Bank will deliver a speech and participate in a panel discussion at the launch of Financial Integration in the Asia Pacific: Future of Australian Financial Services in Sydney.

And to cap off a big day on Tuesday, the Bureau of Statistics (ABS) issues May data on new vehicle sales. The industry body – the Federal Chamber of Automotive Industries – has already released the detailed vehicle sales data. The ABS will just recast the ‘top level’ data in seasonally adjusted and trend terms. Sales of sports utility vehicles (SUVs) are at record highs, largely at the expense of weaker passenger car sales.

On Thursday, the Reserve Bank releases its quarterly Bulletin publication, containing articles of relevance to the economic and financial environment.

Also on Thursday the ABS releases data on imports of goods as well as detailed job market figures.

The imports data is one of the timeliest indicators available of spending, although figures can get distorted by exchange rate and price changes.
And the detailed job market figures will contain details of employment by industry as well as demographic and regional dissections of the job market data.

Investors only have eyes for the US Federal Reserve

The stand-out event for investors in the coming week is the meeting of US Federal Reserve policymakers over Tuesday and Wednesday. But there will also be a healthy supply of economic data to monitor.

The week kicks off on Monday in the US with data on industrial production to be released together with figures on capital flows, the New York Federal Reserve manufacturing index and the National Association of Home Builders sentiment gauge. Economists tip only a modest 0.2% lift in production in May after the 0.3% fall in April.

On Tuesday, the US Federal Reserve begins its two-day meeting, while data on housing starts (commencements) is released together with the weekly survey of chain store sales. Housing starts may have eased 3% in May after a huge 20.2% lift in April.

On Wednesday the Federal Reserve hands down its interest rate decision (decision at 4am Sydney time on Thursday). No one expects the interest rate “normalisation” process (rate hikes) to begin just yet, but investors will be hoping for future guidance.

Also on Wednesday the usual weekly data on housing finance activity is released.

On Thursday the weekly data on jobless claims is issued, together with consumer prices (inflation), the current 
account, the leading index and the influential Philadelphia Federal Reserve survey.

The consumer price index (CPI) data should show that underlying (core) inflationary pressures are still restrained. The core measure of prices (excludes food and energy) may have lifted 0.2% after a 0.3% rise in May. But the headline CPI may have lifted 0.5% in May, underpinned by higher gasoline prices, after a 0.1% increase in April.

And the leading index may have posted a 0.4% gain in May after a 0.7% rise in April, suggesting stronger economic growth – and higher interest rates – lies ahead.

In China, there is just one indicator to watch – the measure of house prices, to be released on Thursday. 

Sharemarket, interest rates, currencies and commodities

The first half of the 2015 calendar year is almost complete. So it is an opportune time to look at how the Aussie dollar has been travelling – especially given the Reserve Bank’s view that it should currently be lower, providing greater assistance to our economy.

The Aussie dollar started the year near US82 cents, hitting highs of US82.95c on January 15. However it spent little time at the highs, falling to just over US76c in February, US75.58c in March and the low for 2015, on April 2, at US75.3c. After lifting again to US81.62c on May 14, the Aussie has held US76-78c over June.

The Aussie has tracked over an US7.65c range in 2015, making it the least volatile start to a year in a decade.