Next Week At A Glance

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By Greg Peel

Will the RBA raise on Tuesday? That's the $64,000 question. The signals at present are very conflicting which is why there's little agreement between economists.

The RBA has always suggested the flood and cyclone set-back would only be temporary, but has also seen Australia's two-speed economy as providing a policy balance. The Q1 GDP report showed significant growth in consumer savings, which would help the RBA hold off, but also reasonable spending growth and the first signs of a pick-up in (non-mining) business investment, which is the opposite. The report also showed that export loss from the weather was greater than expected which might help the RBA to hold off but then yesterday's retail sales number showed a big jump which suggests the opposite. And the wages number showed inflation is starting to creep in as well.

The language of the minutes of the last RBA meeting screamed June rate rise. Those economists tipping June nevertheless backed off to July after the GDP report, while another camp remains solidly based in August following the Q2 GDP result.

Got a coin?

Before we get to Tuesday we have to get past tonight's US jobs report, which has also become a bit of a guess and giggle for an increasingly nervous market, as well as all the global service sector PMIs out in the next 24 hours. We recall that the US service sector represents 80% of that economy's output.

It's a much quieter week next week data-wise in the US although we will see the Fed's Beige Book, along with the monthly trade balance and Treasury budget – the latter being much a bone of contention right now. The Treasury will also auction US$64bn of three and ten-year bonds and thirty-year notes at a time when the US economy is threatening to double dip, but the ten-year yield is at its lowest in six months.

Next week in Australia is one in which private data releases dominate, highlighted by the ANZ job ads series, the TD Securities inflation gauge, the NAB business survey and the Westpac consumer confidence report. We'll also see housing finance, investment lending and unemployment, but all of that comes after Tuesday's rate decision.

It's also rate decision week for the European Central Bank and the Bank of England. While the ECB's rhetoric will be closely monitored on Thursday a rate rise is unlikely until the Greek situation is resolved (again) and nor is the BoE expected to move.

On the local stock front, the AGM season is finally winding down and we are now entering the period in which the last of the “confession session” will give way to the “blackout”. In other words, if there are any companies needing to provide profit warnings they'll be doing it pretty soon before the books close and time is spent filling out tax returns ahead of the August result season.

Before that, Tabcorp ((TAH)) casino spin-off Echo Entertainment will list on Monday with a code of EGP and Metcash ((MTS)) will provide the full-year profit result it was meant to provide last week (according to previous calendar assumptions).

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.

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