The Week Ahead: Horses For Courses

This story features WESFARMERS LIMITED, and other companies. For more info SHARE ANALYSIS: WES

By Greg Peel

With less US data coming out this week the attention turns to monetary policy elsewhere in the world, with the EU and UK making rate decisions along with the RBA in Australia. There has hardly been a piece of economic data that’s not been ominously strong since the RBA left rates unchanged in October, so the second biggest bet this week will be that Wednesday will see a 25 point hike.

The biggest bet will be on an equine flu depleted Melbourne Cup which is run on Tuesday. There is a holiday in Victoria, and everyone else in the east takes a holiday after lunch. By 9.30am on Wednesday the hangovers will be palpable.

Monday in Australia sees the release of the Melbourne Institute-TD Securities inflation gauge for October. The RBA meets on Cup day Tuesday and announces its decision on Wednesday. Wednesday will also reveal September housing finance and the third quarter house price index. On Thursday we learn all the employment/unemployment data for October.

Both the European Central bank and Bank of England announce their interest rate decisions on Thursday night. Were either to cut, which is not widely expected, there could be a sharp bounce in the US dollar sparking panic profit-taking in gold.

In the US, Monday sees the ISM non-manufacturing index for October. Fed chairman Ben Bernanke makes a speech on Tuesday in which he will no doubt justify the Fed’s actions from last week. Wednesday brings third quarter non-farm productivity and labour costs, and September wholesale inventories and consumer credit. Friday wraps up with the September trade figures and the Michigan U consumer confidence measure for November.

On the local stock front, third quarter production reports from the resource sector have come to a close, but the AGM party rolls relentlessly on. Meetings are held by both Coles ((CGJ)) and Wesfarmers ((WES)) to discuss their scheme of arrangement. CSR ((CSR)) and SingTel ((SGT)) post interim results while finals are forthcoming from News Corp ((NWS)) and National Bank ((NAB)). David Jones ((DJS)) posts first quarter sales. All information is available on the FNArena calendar.

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