Weekly Reports | Nov 13 2009
By Greg Peel
Tonight sees Michigan Uni’s monthly read on US consumer confidence, which can have the power to move markets. An unemployment rate of 10.2% may not have fazed Wall Street, but it will be another story on Main Street. Let us not forget that the US consumer is responsible for 70% of US GDP, although with a falling US dollar that figure must soon come under threat.
Monday kicks off with Japan’s first estimate of third quarter GDP ahead of the Bank of Japan’s monthly monetary policy meeting on Friday next, at which 0.25% will be maintained. In a very quiet week for Australian data, the Reserve Bank will release the minutes of its last rate meeting on Tuesday.
Australian economists have been reinforcing their lack of any perceivable value since Cup Day, flipping from yes to no in a blink on whether there will be a December rate rise. No doubt the RBA minutes will be pored over for clues, but this is most likely a complete waste of time. Much was made last week of Glenn Stevens’ statement which suggested monetary policy would be “lessened gradually”, leading most geniuses to take this as a suggestion December would see a pause. Just between you and me, he used EXACTLY the same words in October and we had a 25 point rise in November.
We will have a 25 point rise in December.
It will be a very busy week for the US on the economic data front next week. As to what Wall Street will make of it all is anyone’s guess, given any good news is pretty much baked in. Wall Street is currently sitting at a 50% retracement of the fall from 2007 (in Dow terms) which has provided a strong technical reason to do nothing at this point until something extraordinary happens.
Next week in the US sees the official house price index, the housing industry sentiment index, housing starts, business inventories, the New York Fed manufacturing index, retail sales, industrial production, PPI, CPI, US dollar asset flows, leading economic indicators and the Philadelphia Fed activity index, just to keep things interesting.
Locally there will be more Annual General Meetings next week than anyone would care to count, with a scattering of ASX 200 companies amongst them.
For a more comprehensive preview of next week’s events, please refer to “The Week Ahead”, published each Monday morning. For all economic data release dates, AGM dates and times and other relevant information, please refer to the FNArena Calendar.
