Weekly Reports | Nov 11 2011
By Greg Peel
If everything goes to plan, the Italian parliament should pass the necessary 2012 budget bill before Monday and Mario Monti should be appointed prime minister of an interim unity and technocratic government. But when it comes to Europe, nothing has really gone to plan for the last two years.
So we will head into next week with qualified confidence that maybe the latest disaster can be averted at least until such time as the next disaster emerges. Most investors are sitting on the sidelines and it's not hard to see why.
Tonight is Veterans Day in the US which is a good excuse to take a long weekend anyway despite stock and commodity markets remaining open. Banks and the bond market will be closed with the latter being more a focus of attention at present than thinly traded stocks.
Inflation is then under the spotlight in the US next week with the release of the CPI. While inflation is always important, the US numbers are becoming increasingly important as expectations grow that the disaster that is Europe will eventually force the Fed into QE3. While positive inflation growth implies a healthy economy, Wall Street will probably be willing on a CPI reduction to remove anything the Fed can use as an excuse not to act.
It's a busy data week in the US with retail sales, industrial production, business inventory, housing sentiment and housing start numbers all due, along with the Empire State and Philly Fed manufacturing indices and the Conference Board leading index.
Data releases will also be interesting in the eurozone next week given an estimate of September quarter GDP will be provided as well as industrial production, trade balance and inflation updates. The combination of those three, with inflation critical, may determine whether the new ECB president will go again with a rate cut.
The relentless wagon train of AGMs rolls on in Australia next week as the final two weeks of November see a late surge. Data-wise we'll see building approvals and housing finance and the minutes of the RBA meeting which brought us the Cup Day rate cut.
Next week will also see the first of the September quarter data forming the lead-up to the GDP release next month, with wholesale prices and average weekly wages in the frame.
The corporate highlight next week amidst all the tea and biscuits will be a quarterly trading update from CommBank ((CBA)) on Tuesday.
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.