FYI | Jan 15 2007
By Rudi Filapek-Vandyck
Amidst diminishing market expectations for imminent rate cuts in the US, but a stronger case for further tightening in Australia and New Zealand, Energy Resources of Australia (ERA) will open the corporate reporting season on Tuesday this week.
The uranium spot price has remained stable at US$72/lb thus far in January, but market speculation has it management may have a nice surprise coming from exploration this week. All will be revealed on Tuesday, if speculation has any substance.
ERA’s quarterly report will be followed by similar releases by Coal and Allied (CNA) and the majority shareholder in both ERA and CNA, Rio Tinto (RIO) on Wednesday. If indications from both CommSec and CMC Markets are correct, traders in CFDs have been taking rather large positions in commodity companies over the past few weeks. Their wisdom will be tested from this week onwards amidst a shaky environment for base metals and oil but a possible rebound in precious metals.
On Thursday Iluka (ILU) reports its December quarter results. The big surprise on the day, however, may well come from Japan where the Central Bank is reportedly seriously considering surprising the markets with a small interest rate hike.
The preceding day, on Wednesday, should provide investors and central bankers in New Zealand with more insight in how inflation is faring across the Tasman. The release of the December quarter consumer price index should not go unnoticed with an increasing amount of experts expecting the RBNZ to tighten further. The RBNZ meets next week. Friday will see the release of NZ retail sales in November.
Following the Bank of England’s surprise decision to tighten monetary policy in January and hawkish rhetoric from central banks in Switzerland and Japan, investors are seemingly on high alert for further signals that other central banks may be about to join the tightening trend. There seems to be a growing consensus that two of the most likely candidates are the central banks in Australia and New Zealand.
The next RBA meeting is not due until February 6 so investors are likely to zoom in on the RBA bulleting to be published on Thursday and Q3 import and export pricing data on Friday. Today’s release of the TD Securities/Melbourne Institute inflation data for December again reinforced the case for possible further RBA tightening.
Amidst decreasing expectations the US Fed may soon be forced to start lowering official interest rates, Wednesday should see a flood of data being released including housing data for January, producer price indications for December as well as industrial production for December.
Thursday follows up with US data on CPI, housing starts, building permits and leading indicators while several Fed officials are on the agenda for speeches on Thursday and Friday.
Enough to keep boredom far, far away.