Weekly Reports | Feb 19 2010
By Greg Peel
Strap yourself in. Next week in Australia features the final and by far the busiest week of the February reporting season. There are too many releases to highlight here, so the FNArena calendar is the best point of reference.
It's also an important week for economic data, and the RBA board members will be glued to their screens looking for guidance as to whether the cash rate needs hiking again in March. In the minutes of the last meeting, released this week, the RBA indicated it was currently poised having brought rates out of their emergency levels late last year. Any rate rise from here will be driven by ongoing data.
Next week in Australia sees vehicle sales, leading economic indicators and fourth quarter wage costs. Of most interest nevertheless will be fourth quarter private capital expenditure – an indication of whether businesses are now more confident to invest in new plant, equipment and projects – and January private sector credit – a key indication to the RBA of whether the appetite for borrowing at both the business and consumer level is on the rebound, and whether mortgage demand is still strong now that government incentives have been reduced.
It's a busy week offshore as well, concluding next Friday with with first revisions to both the UK and US fourth quarter GDP estimations. The UK's first estimate was 0.1% growth, and economists expect that figure to be revised upward given 0.4% growth was previously expected. The first estimate in the US was for 5.7% growth, and every man and his dog expects that number to be slashed on the first revision, perhaps markedly.
Next week is a big one for housing in the US, as the Case-Shiller house price index, the FHFA house price index, and sales data for new and existing homes will all be released. The Dallas and Chicago Fed regions will update economic activity, and two measures of consumer confidence will be provided. New durable goods orders will be a highlight on Thursday.
Next week the US Treasury will auction another truckload of debt in the form of two-year, five-year and seven-year notes and thirty-year inflation-adjusted bonds. The auctions total US$126bn of face value, and given the very weak response to longer bond auctions last week the Treasury will be hoping the world is still keen to pay up for shorter term “safe haven” protection. Financing the US deficit is no easy task.
Tonight in the US sees the release of the January consumer price index. Last night's PPI was higher than expected and the sudden move by the Fed to raise its discount rate this morning (our time) has made Wall Street jittery. When will the Fed raise its cash rate? Consensus still has either late 2010 or 2011 as the answer but nervousness is building.
For a more comprehensive preview of next week's events, and for a wrap of Friday night's market moves, please refer to FNArena's new new Monday Report.
