FYI | Jan 20 2008
By Rudi Filapek-Vandyck
Investors’ attention is expected to switch to global inflation in the coming week – you know; the other economic concern that seemed poised to cause headaches prior to fears of a US recession grabbing all the available space in newspaper headlines and investors’ psyche. The new week comes with its own little twist as economic data from the US is rather light this week. Time for some relief? No doubt many an investor is hoping the answer will be affirmative.
Maybe the most important contribution from the US this week could be the fact that US markets are closed on Monday in memory of Martin Luther King Jr. Pfew, I hear you all think, at least Australian investors won’t be looking at another heavy US share market loss when they sit down behind their pc screens on Tuesday morning.
No less than four major economies will be reporting price data this week: Germany (producer prices), Australia (consumer and producer prices), Japan (consumer prices) and Canada (consumer prices). Persistent inflationary pressure have been a global phenomenon, with the exception of Japan where policymarkers actually would welcome to see a trend of rising prices.
Inflation will definitely capture headlines in Australia this week as the Reserve Bank and Treasury have been warning households further actions will be needed to tame the local price tiger. On Monday Australia’s PPI for the December quarter will be released. On Wednesday the consumer price data will follow. In between, on Tuesday, the release of new vehicle sales is on the agenda.
The most important release -by far- will be on Wednesday. Current market expectations are for a CPI increase between 0.7-1.2%.
In New Zealand, the RBNZ will announce its interest rate decision on Thursday, but the bank is widely expected to leave interest rates unchanged at 8.25%. Earlier in the week the Canadian central bank is expected to do the same on Tuesday and so should the Bank of Japan, also on Tuesday.
Canada will also publish CPI data, as well as retail data. They might take centre stage this week in North America as US data remain on the light side. Existing home sales on Thursday are poised to attract investors attention as the data will provide yet another insight in the sector downturn.
The UK will also release another insight into housing prices as well as the minutes from the last Bank of England meeting. The European calendar remains pretty busy this week with the PMI manufacturing index and industrial new orders for the Euro-Zone and PPI, IFO business expectations index and the GfK consumer confidence survey for Germany on the calendar.
The data flow in China picks up this week with GDP, PPI, CPI, retail sales, industrial production and fixed asset investment all to be released.
After this week schools will open in New South Wales, and oh yes, the Fed makes a decision about US interest rates.
For more details: see the more detailed calendar on the FNArena website.
