(Happy birthday to all the horses across Australia and around the globe – may you be fast in action and slow in retirement.)
A quieter week ahead compared after what we saw and heard last week – just a little quieter though with a rate rise in Australia, another expected in India, the US jobs data for July, start of month data in Australia, the US, Europe and China and the start of a new month for markets.
In Australia, the Reserve Bank is expected to raise its cash rate tomorrow by another 0.50% as part of the central bank’s attack on rising inflation and inflationary expectations.
That will take the cash rate to 1.85% – the highest in six years – since June 2016 when it was 1.75%.
RBA governor, Philip Lowe will explain the reason for the latest rise in his usual post-meeting statement as well as reveal some of the new economic forecasts for the rest of 2022 and early 2023.
The RBA’s Statement on Monetary Policy (SMP) on Friday will flesh out those reasons will lower its unemployment rate forecast for this year to 3.25% (from 3.5%) according to AMP chief economist, Shane Oliver.
He says the SMP will also revise down the growth outlook for the next year and revise up the inflation outlook to over 7% (annual) for 2022 (Federal treasury last week estimated it at 7.75%).
On the data front in Australia, CoreLogic home price data for July today (Monday) is forecast to show a 1.5% fall nationally last month with Sydney prices dropping by 2.3%.
Housing finance and building approvals data tomorrow (Tuesday) are forecast to show falls of 14% and 2% respectively, June quarter real retail sales (Wednesday) to rise 0.6% and the June trade surplus (Thursday) to fall back to $12.5 billion, according to the AMP’s Shane Oliver.
There are a few small local June 30 results this week – Genworth Mortgage, Credit Corp, Stanmore Resources, ERA and Aussie Broadband.
In the US, the main focus is likely to be on July jobs data to be released on Friday which is expected to show a further slowing in payroll growth to around 250,000, unemployment flat at 3.6% and wages growth again slowing slightly to an annual 5.1%.
June data for job openings tomorrow is likely to remain high but show some moderation and the business indicators (Monday and Wednesday) for July are likely to slow further.
US June quarter earnings reports will continue but many companies are second or third tier.
BP is top tier and releases its quarterly figures this week, along with smaller oil groups, Occidental, Marathon, Murphy Oil and ConocoPhilips.
Last week, Shell, Exxon, Chevron and Total Energies reported net profits for the June quarter of more than $US60 billion in total – all four reported record results. BP will add billions to that figure, as will the smaller oil groups.
There are a few media groups led by the New York Times, Liberty Media, AMC Networks, EW Scripps, Lee Enterprises, EchoStar and Warner Brothers Discovery.
Reports are also expected from Marriott, the hotels group, Wynns Resorts, MGM International, Airbnb, Uber, Lyft, Yum Brands, Clorox, McKesson – a drug store chain, Dana Inc, Nutrien (the Canadian fertiliser group which is expected to report record figures), US LNG group, Cheniere Energy (big earnings from this company as well), eBay, Starbucks, Caterpillar, Moderna, Novavax, Block Inc (Afterpay’s owner), Kellogg, Saputo Inc, (the Canadian dairy group that owns dairy businesses in Victoria such as Warrnambool Cheese, Murray Goulburn), Loews Corp and Activision Blizzard (which is subject to a takeover bid from Microsoft).
Berkshire Hathaway is also expected to report next weekend.
In Asia, the Reserve Bank of India is expected to lift rates tomorrow as well by 0.50% to 5.4%.
Today sees the release of the second monthly survey of manufacturing activity after yesterday’s official survey release which showed a surprise contraction in Chinese manufacturing with the steepest fall in three months.