In the coming week, Reserve Bank events dominate. Governor Philip Lowe’s speech in Adelaide on Thursday will hog the headlines. The minutes of the June 4 Board meeting are issued on Tuesday. On the data front, the Bureau of Statistics (ABS) provides updates on population growth, property prices and jobs. Skilled internet job vacancies figures are also issued.

On Tuesday

The week kicks off on Tuesday with a speech by the Reserve Bank’s Head of Financial Stability Jonathan Kearns at the Property Leaders’ Summit in Canberra at 9.15am AEST. And the Reserve Bank Board’s June 4 monetary policy meeting minutes will be keenly observed. At that meeting rates were cut for the first time in almost three years.

Also, on Tuesday, the regular weekly reading on consumer confidence is published by ANZ and Roy Morgan. And the ABS released its quarterly publication “Residential Property Price Indexes”. Apart from home prices there is other data covering the average value of homes and changes in the number of homes in each state.

On Wednesday

On Wednesday the Department of Jobs and Small Business releases the Internet Vacancy Index for May. Vacancies have fallen for four successive months and are down by 5.8% over the year to April – the weakest growth rate in five years.

On Thursday

On Thursday the Commonwealth Bank issues its Business Sales Index for May. But all eyes with be on Reserve Bank Governor Philip Lowe’s speech at the CEDA luncheon in Adelaide at 11.15am AEST. The July 2 Reserve Bank Board monetary policy meeting is considered a ‘live’ meeting for another potential interest rate cut. Economists, therefore, will be scrutinising the commentary very closely for further clues on the policymaker’s views. 

Also, on Thursday, the ABS releases the December quarter population estimates. Annual population growth probably held near 1.5-1.6% – still one of the fastest rates across advanced nations. And detailed estimates on the job market for May are also issued. The data will include industry estimates of employment.

On Friday

On Friday, the Commonwealth Bank’s ‘flash’ services and manufacturing gauges for June are issued.  

Overseas: US Federal Reserve interest rate meeting dominates

In the US, the Federal Reserve interest rate decision is the key focus of investors over the coming week. US housing data and manufacturing gauges also feature prominently. Home prices data is scheduled in China.

On Monday

The week begins on Monday in the US when the New York Empire State Manufacturing Index is issued together with the National Association of Home Builders’ (NAHB) Housing Market Index for June. Home building sentiment in the north-eastern region of the US rose by 10 points to 65 points in May - the highest level since October 2005.  

On Tuesday

On Tuesday in China, home price data is scheduled. Home prices rose 10.7% in the year to April – the strongest growth in two years. Economists are forecasting prices to grow by 12% over the year to May. 

Also, on Tuesday in the US, the regular US weekly data on chain store sales is scheduled along with the monthly update on housing starts and building permits for May. Starts rose by 5.7% to 1.235 million units in April, driven by gains in the construction of both single and multi-family housing units. Sentiment was boosted by declining mortgage rates and drier weather in the Mid-west region of the US. A 0.4% lift is tipped in May.

On Wednesday

On Wednesday the US Federal Reserve Open Market Committee (‘FOMC’) hands down its interest rate decision following its two-day meeting. No change in the Federal Funds target rate of 2.25-2.50% is expected in the near term after the FOMC’s ‘dovish’ commentary earlier this year.

While US policymakers are expected to remain data-dependent, economic growth is expected to slow to an annual growth rate of closer to 2% by year-end as the corporate tax cut stimulus fades. But late-cycle growth remains supported by solid consumer spending on the back of labour scarcity and low joblessness. That said, persistently low inflation and the intensification of US-China trade tensions could necessitate policy action.  

Also, on Wednesday, the regular weekly reading on new mortgage applications are released.

On Thursday

On Thursday, the US current account deficit is forecast to narrow to US$130 billion in the March quarter from US$134.38 billion in the December quarter. 

Also, on Thursday, the influential Philadelphia Fed Manufacturing Index, Conference Board Leading Index and the usual weekly data on claims for unemployment insurance are all released. The ‘Philly’ Fed factory gauge will likely remain sensitive to negative trade headlines. And growing inventories are also weighing on US output. A weakening in conditions is expected in June after the US increased import duties (tariffs) from 10 per cent to 25% on US$200 billion worth of Chinese goods on May 10. That said, the proposed 5% US tariffs on Mexican goods have been averted for now.

On Friday

On Friday, IHS Markit issues June ‘flash’ manufacturing indexes. Factory activity is contracting in Germany and Japan. The final US gauge fell to 50.5 points in May, the lowest reading since August 2009.

Also, on Friday, US existing home sales figures are issued for May. An increase of 1.4% is forecast by economists.