By Craig James

In Australia, the week begins on Tuesday when the Bureau of Statistics (ABS) releases two ‘big picture’ publications. The first ‘Australian Industry (2013/14)’ provides insights into industry performance and structure. And the second, ‘National Regional Profile (2009-13) includes regional economic data. 

On Tuesday the Reserve Bank releases the financial aggregates publication that includes data on lending (private sector credit) and the money supply. And Reserve Bank Governor Glenn Stevens delivers a speech. 

On Wednesday, the ABS releases building approvals data for May. While volatile, building approvals is a forward-looking  measure of building activity. On the same day, CoreLogic RP Data releases data on home prices for June – the timeliest and most accurate estimates of home prices. Based on daily observations, home prices probably rose by 0.7% in June with Sydney prices up 1.3%. 

Data on engineering construction is also issued on Wednesday and will show that activity continues to ease back to ‘normal’ levels after the mining construction boom. 

On Thursday, the ABS continues to ‘catch-up’ with tourism and migration figures, releasing estimates for April. The data for May will be released less than a week later on July 7, and by that time the ABS will largely be up-to-date in the provision of these key statistics that impact consumer spending and the job market.

Also on Thursday the monthly trade figures for May are issued. While the data on exports and imports don’t generally move financial markets nowadays like they did in the past, the record trade deficit of $3,888 million in April did cause investors and traders to take notice. 

And on Friday the ABS releases the May data on retail spending. This data covers the period when the Reserve Bank cut interest rates to record lows and the federal government delivered a stimulatory Budget. So policymakers would hope a solid sales result for the month. 

International - US Employment in focus 

US investors have a holiday-shortened week to look forward to with non-farm payrolls (employment) the highlight. 

The week kicks off on Monday in the US with data on pending home sales and the Dallas Federal Reserve manufacturing index. 

On Tuesday, the CaseShiller data on home prices is released with consumer confidence, the Chicago purchasing managers index (PMI) and measures of services sector activity in Dallas, and more broadly, Texas. Home prices are up 5% on a year earlier while confidence may have edged higher from 95.4 to 97.3.

On Wednesday the ADP estimate on private sector payrolls is released, a precursor to Thursday’s official data. The ISM and Markit measures of manufacturing activity are also released on Tuesday together with auto sales, construction spending and the Challenger survey of job layoffs together with the usual weekly data on housing finance activity. 

On Thursday the official employment data for June is released – the non-farm payrolls figures. Job growth has been consistently strong and is tipped to have lifted by 225,000 in June after a 280,000 increase in May. The unemployment rate is also expected to have eased from 5.5% to 5.4%. If the data is any stronger, investors and economists will need to bring-forward estimates that the first rate hike won’t be delivered until late in the year.

Also on Thursday, data on durable goods orders is released together with the ISM New York index. The Independence Day holiday is taken on Friday. 

In China, the official statistician (National Bureau of Statistics) releases the purchasing managers’ indexes for both the manufacturing and services sector on Wednesday. The HSBC variant of the manufacturing index is also issued on Wednesday with the services gauge released on Friday. 

Sharemarket, interest rates, currencies and commodities 

The Australian sharemarket started 2014/15 with the All Ordinaries at 5,382.0 and the ASX200 at 5,395.7. Currently the All Ords is near 5,672.7 points (up 5.4%) with the ASX200 at 5,686.8 (up 5.4%). 

Of the 21 current industry sub-sectors, 15 sectors are currently higher over 2014/15. The key under-performer has been energy, down by 19.0%, followed by capital goods (down 18.6%) and media (down 15.7%). Strongest growth has been by the consumer durable and apparel sector (up 47.1%) followed by pharmaceutical an biotechnology (up 34.9%) and transportation (up 32.9%). The large banks sector has lifted just 3.8% with the resources sector down 15.2% (largely materials and energy) but the A-REIT sector (property trusts) has lifted by 21.3%.