Weekly Reports | Mar 11 2011
By Greg Peel
It is illegal to stage a protest in Saudi Arabia, and the government has taken the time to reiterate this point ahead of tonight's planned “Day of Rage”. Protesters were already being dispersed last night in the city of Katif, with what is assumed to have been rubber bullets. While the Egyptians have led the way, and Libya is now locked in a civil war, it is unrest in the world's biggest oil exporting nation that markets most fear.
While the basis of Saudi protests echoes that of other Arab nations – a call for democracy – there is also a sectarian undertone. Saudi Arabia is ruled by Sunnis and it is the Shi'ite minority leading the protests. There is thus greater concern an escalation of unrest on the Saudi peninsular could develop into something more sinister.
President Obama has again made the point that the US government can release strategic oil reserves if necessary. Last night the oil price fell despite news from Saudi Arabia as the US dollar bounced. As to what may transpire tonight we can only guess at this stage. The Saudi monarch has already offered a preemptive US$36bn social reform package as a concession. The government has indicated it will not tolerate unrest.
Wall Street is not panicked, but not in much of a buying mood either. Tonight sees the release of February retail sales data.
Next week the Fed will hold a monetary policy meeting and provide a statement on the Tuesday. While traders will be looking for clues as to whether or not QE2 will expire as planned, or whether a QE3 might be in order, there is little change expected in the Fed's language from previous months.
Across the week the US will also learn the Empire State and Philadelphia Fed manufacturing indices, housing market sentiment, housing starts, industrial production and the PPI and CPI.
The minutes of the RBA's March monetary policy meeting are due on Tuesday, with little surprise expected. In a quietish week we'll see vehicle sales, the Westpac leading economic index and fourth quarter labour force data.
The weakness experienced this week off the back of the oil price has not been helped by a large swathe of stocks going ex-dividend. There are more but far fewer stocks going ex this week, albeit selling ahead of dividend reinvestment programs is also rife.
For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.
