FYI | Nov 27 2006
By Greg Peel
Economists had a slow week last week, but this week will be different.
In Australia, the new home sales figure for October is released today, which will prove significant in the face of two interest rate rises.
Wednesday sees the October balance of trade, which is expected to blow back out to a $1bn deficit given increased imports. Wednesday also brings us “construction work done” in October.
On the interest rate front, Thursday is the big day. October retail sales will give an indication as to the contrasting effect of lower petrol prices and higher interest rates (before the November rise). This is particularly important as retailers are now in full Christmas exploitation mode. Also released is private sector credit for October.
But the biggie on Thursday is capital expenditure for the September quarter. Capex is the direct indicator of business investment, the growth of which came in at a paltry 0.1% in the June quarter. HSBC economists are expecting a 2% result this time, but note that the growth trend is still down. Falling capex growth plays directly into a reduction of GDP forecasts, which in turn will have a significant bearing on the RBA’s consideration of a further interest rate rise.
In the US, Tuesday night brings October durable goods orders and existing home sales, as well as November business confidence. Tuesday night will be keenly watched as new home sales for October are released along with the all important third quarter GDP and the Fed beige book.
Thursday brings personal spending, while Friday brings construction spending, vehicle sales, the house price index, and the benchmark ISM manufacturing index. The ISM is held as a good indicator of US economic performance.
On the bourse, today should see the release of the findings of the Cole Enquiry, which was handed down to the government on Friday afternoon. At the same time ABB Grain (ABB) will release its full year result. And today will also see the listing of the newly reconstructed Brambles with a new code of BXB.
Most importantly however, was it wrong not to force the follow-on? Can we take five wickets before a forecast storm this afternoon? Could Freddie and the South African hold out? Oh the anxiety. Second test begins on Friday in Adelaide.