· The seasonal slowdown in economic and financial events will be in evidence over the coming fortnight. There are few indicators that can truly be regarded as ‘top shelf’.
· The fortnight kicks off on Monday with the Federal Treasurer expected to release the mid-year budget update: the Mid-Year Economic and Fiscal Outlook (MYEFO) report. On data available to October, the budget is tracking well, with the deficit around $3-4 billion better than expected due to higher revenues. However with the annual deficit near $31 billion, there is some work to do to return the budget to surplus.
· Also released on Monday is the Bureau of Statistics (ABS) estimate of new vehicle sales. Industry estimates already show that November sales were the highest for a November month. The ABS will provide seasonally adjusted and trend estimates of the vehicle sales figures.
· On Tuesday, the Reserve Bank releases minutes of the Board meeting held on December 5. The statement released to announce the interest rate decision on that day highlighted emerging skills shortages. Investors will be looking for further elaboration of the observation.
· The usual weekly measure of consumer sentiment from ANZ and Roy Morgan is also released on Tuesday.
· On Wednesday, Commonwealth Bank issues the Business Sales Indicator – a measure of economy-wide spending that is derived from looking at credit and debit card transactions through the bank.
· Also on Wednesday, the ABS releases its Finance and Wealth publication, a report that contains information on the household balance sheet. Despite all the hand-wringing, household balance sheets are strong with wealth at record highs.
· The Finance and Wealth publication also includes other data such as foreign holdings of bonds and equities.
· On Thursday the ABS releases detailed November estimates of the job market. And the latest update includes the quarterly estimates of employment by industry. Healthcare is by far the leading employer in Australia.
· And in the week after Christmas, there is a clear drying up of economic and financial events. The main indicator of interest is the Private Sector Credit data (or loans outstanding) from the Reserve Bank. Credit is up by 5.3 per cent on a year ago, below the near 6 per cent nominal growth of the Australian economy.
Overseas. No rest for investors.
· While economic data dries up in Australia, the same can’t be said for the United States with a raft of indicators scheduled over the coming fortnight.
· In the US, the fortnight kicks off on Monday with the release of the National Association of Home Builders (NAHB) sentiment survey. And on Tuesday the November data on housing starts is released together with the September quarter current account figures. The usual weekly data on chain store sales is also released on Tuesday.
· On Wednesday in the US the data on existing home sales for November is released together with the usual weekly data on mortgage finance.
· On Thursday the final estimate of US economic growth for the September quarter is released. Little change is expected from the preliminary estimate of 3.3 per cent annualised growth. The influential Philadelphia Federal Reserve survey is also released on Thursday with the Federal Housing Finance Agency (FHFA) measure of home prices and the weekly data on new claims for unemployment insurance.
· On Friday in the US the November data on personal income and spending is released. And while the income and consumption data is interesting, it is inflation – the core personal consumption deflator – that attracts most interest, being the Federal Reserve’s preferred inflation measure. Inflation is contained at just an annual rate of just 1.4 per cent.
· Also on Friday, data on consumer sentiment, new home sales and durable goods orders are released.
· The highlights in the week between Christmas and New Year’s Day are the S&P/Case Shiller measure of home prices; consumer confidence and pending home sales (Tuesday); advance international trade (Thursday); and the Chicago purchasing managers index (Friday).
· In China, the November house price index is released on Monday (December 18) and industrial profits data on Wednesday December 27.
· Looking further out the “official” China National Bureau of Statistics purchasing manager survey results are issued on Sunday December 31.'
Craig James, Chief Economist, CommSec
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