FYI | Mar 31 2008
By Greg Peel
Just to correct an error from two weeks ago – the State government has shifted the end of daylight savings back a week this year, as you’re no doubt aware by now, meaning it is next week the NYSE closes at 6am Sydney time, not this week. This week remains a 7am close.
In what is otherwise a scant week for data in Australia, the RBA will meet and announce its monthly cash rate decision on Tuesday. Evidence is building that the Australian economy might be slowing mildly, and although inflation remains elevated the RBA has hinted that it has done enough for now and it’s time to let the system work recent rate rises through. The RBA is particularly cognisant of independent rate increases from the banks, which now amount to another rate rise anyway.
Following private credit sector data for February today, which could well give the RBA even greater cause to believe its work is done, it is not until Friday’s February employment numbers that any more data of significance are released.
The US, on the other hand, has plenty of ammunition this week for those arguing the economy is already in recession. For starters, it is now the beginning of the US first quarter profit results, which will build as April progresses.
On Tuesday the US learns the March ISM manufacturing index – a number that has the power to determine the mood on the Street. February construction is also released on Tuesday, followed by February factory orders and March vehicle sales on Wednesday. On Friday it’s employment data day – numbers that will be very closely watched. To date the fall in US jobs, while still a fall, has not yet been consistent with a building recession, and the argument goes that the boom up to 2007 did not bring about the usual increase in jobs, ergo any bust will see only a mild fall. This is one reason the call remains for a short, shallow recession and not a deep and lengthy one.
There is a raft of data coming out of both the EU and UK this week, which will potentially affect the state of the US dollar. So far it looks as if the UK is heading into economic weakness, and may to some extent mirror US problems, whereas Europe appears to be defying expectation and firing along nicely despite a strong euro.
For more details: see the FNArena calendar on the website.
