Weekly Reports | Sep 30 2011
By Greg Peel
Today in Australia and tonight across the globe brings the last session for the September quarter. Fund managers will need to decide whether they want to report underweighted equity positions into the next quarter or do some late buying. The bottom line is anything can happen and it won't have much to do with immediate sentiment.
Tonight in the US brings personal income and spending, consumer sentiment and the Chicago PMI. On Saturday China will release its September manufacturing PMI. The HSBC flash number has already suggested a slight tick down but the correlation between the "official" PMI and the HSBC survey is not 100%.
We then move into another week of God know's what out of Europe. There remain only three eurozone members who are yet to vote on the EFSF but there's little doubt those votes will be positive. The real fun then begins, nevertheless, as arguments continue over just how to use that money, and just what level of haircut holders of Greek debt should be forced to take. Why you wouldn't use the EFSF to prop up European banks and then cut Greek debt to market levels is beyond comprehension, but then we note, as always, politicians are making the decisions – not intelligent life forms.
Amidst the wrangling will come the critical ECB policy meeting on Thursday night. Trichet is widely tipped to reverse his foolish rate rise from earlier in the year and perhaps to even slash by 50 basis points to 0.75% in the face of a eurozone economy clearly set to slow.
It's also monetary policy week in Australia and the RBA will stay put. European uncertainty and domestic two-speed issues are keeping the central bank on hold and while the RBA has now indicated it is ready to cut if necessary, this would only come if there were a major collapse and more G20 monetary/fiscal policy coordination as there was in 2008. At this stage it seems unlikely, but then who knows?
Australia joins in global manufacturing PMI day on Monday along with the US, UK and eurozone. Having reported its equivalent on Saturday, China will report its non-manufacturing PMI on Monday. Wednesday is otherwise global services PMI day, Australia included. Throughout the week we will also see building approvals, retail sales and the trade balance.
PMIs aside, in the US we will also see construction spending, factory orders, vehicle sales, chain store sales and wholesale trade. On Wednesday the ADP private sector jobs number will be released and on Friday non-farm payrolls.
The ASX will be open on Monday despite it being a public holiday in some states, as will FNArena. Clocks go forward in some states on Sunday so from next week Wall Street will close at 7am Sydney time instead of 6am.
For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.
