The Week Ahead: Australian Report Card

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By Greg Peel

The state of the Australian economy, and hence the likelihood or otherwise of another rate hike, may be granted some greater clarity this week given a raft of data. Not all data are “official”, but they will help paint a picture nevertheless.

Monday begins with the balance of trade figures for February along with February building approvals and the ANZ jobs survey for March. Tuesday sees the NAB business survey for March. Wednesday is April consumer sentiment and then on Thursday we learn the March inflation indicators and the March employment/unemployment numbers and unemployment rate.

Has there been any let up in Australia’s extremely tight labour market? There might have to be for the RBA not to hike again in May, even if sentiment and other indicators are weak. It is unlikely any inflation indicators will be weak at this point.

The week in the US begins with February consumer credit on Monday, followed by pending homes sales on Tuesday. Tuesday also brings the minutes of the last Fed meeting, at which rates were cut by 75 basis points. Economists will be looking carefully for clues on the Fed’s thinking on the current recession/inflation balance.

Wednesday sees February wholesale inventories and Thursday the balance of trade for February, while Friday wraps up with import prices and the Michigan University consumer confidence measure for April.

Elsewhere in the world it is rate decision time. Japan releases its Tankan Survey of economic activity for the first quarter on Monday and then makes a rate decision on Tuesday. No change is expected. The EU and UK also see rate decisions, both on Thursday. There is a possibility the UK might cut, but the ECB has recently been vindicated in its rigid stance by surprisingly strong economic data and Trichet is very wary of inflation. No change is the most likely outcome, but there is always a slight possibility of a rise. That would mean goodnight greenback.

On the stock front we are heading into the reporting season for Australian banks, beginning this week with Bank of Queensland ((BOQ)). FNArena will provide all the reporting details in the calendar.

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