FYI | Apr 16 2007
By Greg Peel
It’s a relatively quiet week for economic data in Australia as we look for leads as to the possible next move by the RBA in May. However, we may need look no further than across the ditch for a reasonable representation of first quarter inflation.
Unsurprisingly there is a sufficiently close correlation between Australian and NZ inflation movements, at least over the medium to longer term. Both economies are similarly affected by global price influences such as those of oil and other commodities. The NZ CPI for the March quarter is released on Wednesday, and market consensus is for a 0.6% rise following the 0.2% fall of the previous quarter.
Were the figure to come out lower than expected, it might spark a rethink on a rate rise in Australia in May, expectations of which are fundamental to a surging Aussie dollar. The Australian CPI will not be released until April 24. The week will, however, also reveal the US CPI to provide the other side of the equation.
In the meantime, Australia will see the NAB quarterly business survey on Tuesday, and April consumer sentiment on Wednesday as well as fourth quarter engineering construction. Thursday may be more enlightening, given the release of the RBA bulletin which should shed some light on this month’s rate decision, and monthly inflation indicators.
Merchandise imports for March are also released on Thursday, and the week wraps up with March new vehicle sales and the international trade price index.
It’s a busier story in the US. Monday sees business inventories and net foreign securities purchases for February, and retail sales and the NAHB housing index for March. Tuesday brings March housing starts, building permits, industrial production and capacity utilisation – all important indicators on the direction of the US economy – as well as the March CPI.
Thursday brings March economic indicators, as well as the closely watched Philadelphia economic survey – considered a barometer for the whole country.
Elsewhere CPI mania continues with the UK reporting on Tuesday, and China and Canada on Thursday. The Eurozone PPI is also released on Thursday.
The local bourse should open the week on a positive note as takeovers continue to move towards resolution and the market wonders where some $60 billion of funds might go. Base metal prices were strong over the weekend and gold made another strong upward push into the US$680s. Oil was down only slightly. The SPI Overnight showed a 21 point gain.