In the coming week, the Reserve Bank dominates the economic calendar. Top-tier data releases include retail and international trade. Consumer sentiment, job vacancies, inflation and construction data are also issued.  

On Monday

The week kicks off on Monday when ANZ releases job advertisements data for April. Ads have declined for five consecutive months. Vacancies fell by 1.7% in March to be down 6.0% over the year. Also, on Monday the Melbourne Institute issues the monthly inflation gauge. The gauge has lifted by 2.1% over the year to March, above the Consumer Price Index of 1.3%.

On Tuesday

The Reserve Bank Board meets on Tuesday in what is shaping up as the most finely balanced policy get together in years. The annual rate of ‘underlying’ inflation - the Bank’s preferred measure of prices - was the lowest on record at 1.4% in the March quarter, leaving the door ajar for a possible rate cut. But we think that the Board will want to see a “sustained increase in the unemployment rate” before it pulls the trigger. Also, on Tuesday, the Bureau of Statistics (ABS) releases both the retail and international trade data for the month of March. Quarterly retail sales data is also issued. Retail spending rose by 0.8% in February. The annual growth rate stood at 2.9%, just below the three-year average of 3.0%.

Tuesday also saw Australia’s trade surplus rose from $4.35 billion to a record $4.80 billion in February. The annual trade surplus with China hit record highs as did annual exports and imports with China. Roy Morgan-ANZ’s weekly measure of consumer sentiment and AiGroup’s construction gauge round out the data deluge on Tuesday. The construction gauge has contracted for seven successive months with residential home building and dwelling investment both decelerating from their most recent peaks.

On Friday

On Friday, the Reserve Bank releases its Statement of Monetary Policy. All eyes with be on the Board’s economic (GDP) growth and inflation forecasts. Downgrades to the February projections are widely expected. Forecasts for annual GDP growth in 2019 of 3% look optimistic with the IMF recently downgrading its growth forecast to 2.1% – which would be the weakest annual growth rate in a decade, should it materialise. The average of the Reserve Bank’s underlying inflation measures has now been below the Bank’s 2-3% target for 3½ years, pointing to downward consumer price revisions. And projections on the unemployment rate and wages growth will also be keenly observed.

Overseas: Trade and inflation data dominate

In both the US and China, international trade and inflation data are issued. Further US-China trade talks are scheduled in Washington, DC. And a monthly US Federal Budget update is forthcoming from the US Treasury.

On Monday

The week begins on Monday in China when the Caixin services business activity index is released. The gauge rose to its highest level in 14 months in March at 54.4 points. A further expansion of 0.2 points is forecast in April.

On Tuesday

On Tuesday in the US, the regular weekly data on chain store sales is scheduled along with the monthly survey on job openings and labour turnover (JOLTS), IBD/TIPP economic optimism index and consumer credit data.

On Wednesday

On Wednesday in the US, Chinese Vice Premier Liu He is scheduled to lead a delegation to the White House for additional trade discussions. The regular weekly reading on new US mortgage applications is issued. Also, on Wednesday in China, international trade figures for April are due. China's annual export growth rebounded to 14.2% in March, albeit boosted by seasonal distortions. Exports to the US increased by 3.7%. But imports fell by 7.6% in the year to March, led lower by falling oil, copper and steel imports. 

On Thursday

On Thursday data on consumer and producer prices is scheduled in China. Consumer prices accelerated to an annual growth rate of 2.3% in March from 1.5% in February, led higher by rising vegetable and pork prices amid an African swine flu epidemic. But factory deflation still poses a risk, despite rising commodity prices. On Thursday in the US, the usual weekly data on claims for unemployment insurance and the monthly producer prices figures are both issued. Most attention, however, will be on the US international trade balance. The trade gap unexpectedly narrowed to an 8-month low in February of US$49.4 billion due to a lift in commercial aircraft export orders. And the all-important US trade deficit with China narrowed to US$30.1 billion for the month.

On Friday

On Friday, US data on consumer prices, wholesale inventories and the monthly Federal Budget statement are all scheduled for release. Both headline and core consumer prices are projected to grow by 2.1% over the year to April. The US Federal Budget deficit fell from US$233.98 billion in February to US$146.95 billion in March. But a surplus of US$165 billion is tipped by economists in April. The 2018 deficit was the worst in six years.

Financial markets

The US earnings (profit-reporting) season continues in the coming week. Companies expected to report include:

On Monday

Berkshire Hathaway and Tyson Foods.  

On Tuesday

Allergan, Lyft and Marriott.  

On Wednesday

AECOM, Bunge, Chesapeake Energy, Eastman Kodak, Marathon Petroleum and Walt Disney.

On Thursday

Century Casinos, Cheniere Energy, Dropbox, Duke Energy, News Corp, Revlon and Symnatec.