Weekly Reports | Sep 27 2013
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.
By Greg Peel
We end the trading week with all eyes on Washington. The Democrat majority in the Senate will have prepared a stop-gap funding bill by next week which implies expectation of a tough battle between the parties before any resolution can be reached on the US budget, debt ceiling and spending cuts. Volatility is on the cards as polly-speak takes over from Fed-speak for the time being and matters fiscal draw the spotlight from matters monetary.
Wall Street clearly remembers the disaster of 2011, when the new Republican majority in the House flexed its muscles and forced a budget stand-off, ultimately resulting in the US losing its AAA rating from S&P. Stock indices tanked at the time, albeit the rally did not take long to resume. The Fiscal Cliff was quickly discounted.
Beyond the politics, it’s a busy week for economic data releases next week across the globe.
China will enter yet another holiday period, starting Tuesday and ending Friday. HSBC will thus release its September China manufacturing PMI a day early, on the Monday. Beijing will nevertheless release its official manufacturing PMI on the first of the month, and services on the third, as per usual. Australia, the eurozone, UK and US will all release manufacturing PMIs on Tuesday and services PMI on Wednesday as well.
Following on from today’s CPI release, Japan will offer up data for industrial production, retail sales and unemployment next week, along with the quarterly Tankan Survey. The Bank of Japan will hold a policy meeting on Friday.
Wall Street might be focussed on Washington but will nevertheless hold its breath when the US jobs numbers come out on Friday, preceded by the ADP private sector report. Data will also be released in the US for construction spending and factory orders, along with the PMIs. Beforehand, Tuesday represents the deadline for the fiscal year budget bill.
The RBA will meet on Tuesday but no rate cut is expected. The central bank is currently stuck between a rock and a hard place, with the Australian economy still struggling post the peak in mining capex and the Aussie dollar still strong given a lack of Fed tapering on the one hand, and concerns over an investment-led housing bubble on the other.
The week will also see PMI, private sector credit, retail sales and building approvals data.
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