Next Week At A Glance

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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.

By Greg Peel

All talk in the US is of a Fed exit commencing as early as September. It has long been appreciated, nevertheless, that within the group of Fed presidents, and within the FOMC, there is a split between those wanting to rein back bond purchases and those prepared to top them up further if necessary. Those wanting an exit have been the most vocal of late. Ben Bernanke hasn’t said much and as far as we know, he has no intention of reining in QE unless the US economy appears to be improving.

The April jobs numbers suggested this might be the case, but other data points since have indicated creeping weakness. Fed exit talk is pushing up the US dollar which is having a detrimental effect on gold in particular, but also on commodity prices. Wall Street remains stuck between the two sides of the Fed debate. Good economic data is good, and bad economic data means a stronger for longer Fed, which is good.

There will be another round of economic releases for Wall Street to consider next week, including the Chicago national activity index, new and existing home sales, FHFA house prices, and durable goods orders. On Wednesday the minutes of the last Fed meeting will be released, which are quite pertinent in the context given it was at the last meeting the Fed announced it would reduce QE if the economic looked strong, but also top it up if the economy looked weak. Everything said by Fed officials ever since, voting and non-voting, seems to contradict the last policy statement.

Thursday sees a round of flash manufacturing PMI readings, from China, the eurozone and US. Throughout the week, Japan will release its trade balance, the UK its March quarter GDP, and Germany its IFO business sentiment survey.

In a quiet week for Australian economic data, Westpac’s consumer confidence index will be a highlight.

On the local stock front, James Hardie ((JHX)) will release its full year profit result and Myer ((MYR)) will post March quarter sales figures.

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