Australia:
Mon: ANZ FY result, RBA Deputy Governor Andrew Hauser speaks
Tue: CBA, Bendigo & Adelaide Bank Q1 earnings, Business conditions (Oct), Consumer sentiment (Nov)
Wed: Aristocrat Leisure FY result, Lending indicators (Q3), Household spending insights (Oct)
Thu: Labour force (Oct), Orica FY result
International
Tue: US — ADP employment, NFIB small business optimism
Thu: US — CPI (Oct)*
Fri: CN — Retail sales, industrial production & fixed asset investment (Oct)
Thursday’s labour force data is the local focus this week.
The unemployment rate rose, perhaps more than expected, from 4.3% to 4.5% in September, part of which was driven by a higher participation rate.
Another step up would be a cause for concern, pointing to a cooling economy at a time when inflation is starting to edge back higher.
For what it’s worth, the Westpac economics team forecasts the unemployment rate will drop back to 4.4% in October (in line with market consensus) but will peak at 4.6% in the second half of next year.
The consensus pick is that 20-thousand jobs were created in October, while Westpac has pencilled in 14-thousand.
Private sector readings of business conditions and consumer confidence will be released on Tuesday.
NAB’s business conditions survey is expected to maintain a fairly steady reading, bobbing along around the long-term average.
Consumer confidence is back to be being “firmly pessimistic” as Westpac notes about its survey results from October when the RBA signalled its rate cutting would be paused.
November’s survey was taken last week, immediately after the RBA latest decision not to cut and in the aftermath of the news of hotter-than-expected inflation — so expect the pessimism to deepen.
There’s also a bit of corporate news with ANZ releasing full year numbers this morning, while CBA and Bendigo and Adelaide Bank post Q1 numbers tomorrow.
Aristocrat Leisure FY results are out on Wednesday and Orica reports FY numbers on Thursday.
Overseas, the data flow will again be impacted by the US federal government shutdown heading into its sixth week, the longest shutdown in history.
That means important figures such as consumer and producer inflation, retail sales and jobless claims will be missing.
The only US economic data this week is likely to come from private sector surveys such as the weekly ADP employment change and the NFIB small business optimism index.
RBC’s chief US economist Mike Reid is increasingly concerned about not only the absence of the data, but the quality of it when it’s released.
“There is a chance that the October (CPI) release is either cancelled altogether or that the majority of October data is imputed — which jeopardizes the quality of the report.
“As the shutdown stretches into November, we are becoming increasingly concerned that we could see this for a second consecutive month.”
So, what does the lack of data mean for the Fed’s deliberations?
Mr Reid argues it increases the likelihood that the Fed won’t cut in December.
“There is a real possibility that the Fed goes into the December 10th meeting with limited visibility on two months of inflation data — which we expect increases the likelihood of a December pause.
“Chair Powell himself has acknowledged that a December pause is not off the table, stating, ‘What do you do if you are driving in the fog? You slow down!'”
* US CPI is unlikely to be released
