FYI | Jun 04 2007
By Greg Peel
The RBA meets tomorrow to decide not to shift rates at this point, as far as everyone expects, but this week will provide the RBA with some solid data to sink its teeth into for ongoing consideration.
Today brings first quarter company profits and inventories, and the Melbourne Institute-TD Securities inflation gauge and the ANZ jobs ads survey for May. Tomorrow the RBA meets, while learning of the first quarter current account, net exports and public spending, along with April dwelling approvals.
The RBA does nothing on Wednesday morning (albeit with flair) and Thursday brings some numbers the RBA will be most interested in – the employment figures for May. We wrap up on Friday with April housing finance.
Across the Pacific we’ll hear of April factory orders tonight, and the ISM non-manufacturing index for May on Tuesday. Wednesday brings a couple of important numbers in first quarter unit labour costs and non-farm productivity (bearing in mind that the Fed, like the RBA, has a wary eye out for signs of wage inflation). Thursday sees April wholesale inventories and consumer credit while Friday reveals the parlous state of the April trade deficit.
It’s a big week for rates, for despite the RBA’s moment in the spotlight, New Zealand will potentially see another 25bps rate rise to 8.00% on Thursday following the European rate decision on Wednesday night and preceding the UK rate decision on Thursday night.
On the local stock front, things begin to quieten down in June as we move towards the end of many a financial year. AGMs are all but over, and only a handful of dividend ex-dates remain. We will, however, see trading commence in Toll Holdings’ (TOL) infrastructure spin-off Asciano on Wednesday, and Friday is supposedly the closing date for the recently extended Cemex offer for Rinker (RIN), unless it is extended again. Metcash (MTS) will report its FY07 result tomorrow.
The Dow was up 40 on Friday as both it and the S&P 500 pushed into further record territory based on little more than general enthusiasm and too much cash. The big news on Friday however was a US$10.40 jump in the price of gold to US$670.60/oz, following a US$7+ jump the night before. While Thursday pulled gold back from the technical brink based on a slip in the US dollar, Friday’s exuberance was fuelled by the announcement from the European cental bank that it would not sell any more gold ahead of the September close of the Washington Agreement quota year close. Woohoo! It has been central bank selling driving down the gold price from its last run at US$700/oz and putting a lot of fear into gold bulls.
And speaking of inflation, crude oil pushed back up another 1.7% to US$65.08/bbl for July delivery on Friday, once again confounding technical analyst talk of a major downward direction afoot.