Trader’s Diary: Everything you need to get ready for the week ahead
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Pandemic-induced supply chain ruptures, unpredictable swings in demand and some mega-stimmy – all part of the the cause.
The solution – according to some pretty amazing economists polled by Bloomberg – is not to worry about it, just like Wall Street didn’t: inflation, they expect, will drop back to around 3% during 2022.
Because life – as this pandemic continues to prove – really is that easy.
Elsewhere, newly jobless Americans filing claims for the American dole jumped to an eight-week high in the first week of January as the new year began with some Omi-chronic infection rates.
However, Thursday’s weekly jobless claims report from the – always working – US Labor Department shows what is undeniably a quietly constricting employment market. It seems the US jobs market is within a face mask of maximum employment.
At home, the most revealing work of the economic week came out of the ANZ, with senior economist Adelaide Timbrell the first cruncher to offer any numbers on Omicron. And no, they were not good.
Turns out, we’ve been miserly in familiarly record ways this Christmas and New Year.
In particular, Adelaide says Melbourne and Sydney’s bah-humbug was so bad it totally reminded her of the very worst penny-pinching back when we were so memorably locked down during 2021’s Delta outbreak.
Total ANZ-observed spending in Sydney hit its lowest ebb since COVID reared its unwelcome bug-ugly little variant-filled face.
Over in the Winter Olympic city, the only show that really matters will get going on Monday with GDP numbers for the last quarter.
Retail sales, industrial production, and fixed asset investment for December will also be released.
Unlike The Omicron, all these indicators are expected to have lost some momentum. Economists polled by Reuters are saying annual Chinese GDP growth will slow to 3.6% from a previous read of 4.9%.
The Bank of Japan will probably not enjoy its date with the spotlight next week.
Peter McGuire CEO at XM says the bank will likely reaffirm rates won’t rise for a long time, yet – “leaving the yen at the mercy of foreign central bank moves and risk appetite.”
But Peter says the Japanese economy is finally turning a corner.
A weaker yen has helped lift exports, businesses are becoming more confident and – the latest Tankan survey suggests Japan’s jobless rate is comfy at just 2.2%. It really appears the deflation-nation has finally broken those shackles…
“All that sounds good,” McGuire says, but the (Japanese) economy is not out of the woods yet.
Consumption remains weak, wage growth is anemic despite the tight labour market, and the Omicron wave that is sweeping through the country is a major threat to the recovery.”
At home, this week is about the bureau’s December labour force read. CBA expects a boost of circa 60k jobs, the unemployment rate to fall from 4.6% to 4.4% and the participation rate to lift from 66.1% to 66.2%. This survey was taken way back ‘twixt November 28 and December 11 – so no real read on what the Omicron outbreak is breaking.
Also out this week is consumer sentiment data on Wednesday. This one will cover the latest iteration of the outbreak, offering some important data points points on exactly what we’re not doing during this awful new Omicron Adventure.
There’s no stay up late US data this week, but that gives Wall Street and the wider universe time to digest last week’s inflation data and even revisit the cracking Tuesday FOMC testimony from Fed Chair Chair Powell, which took Bitcoin hit a new five day high.
Much less meaningless, Powell’s speech led CBA to reboot their FOMC forecasts, with senior economist Belinda Allen saying the Fed is now expected to start lifting rates in March, rather than May and quantitative easing (QE) will be done in March.
Allen says, “the FOMC is behind the curve as US inflation in both prices and wages is too high.”
The UK’s rising prices, surging energy costs and it’s PM who’s both determined to stay open no matter the cost and is also a bit of a fibber, combined to elevate inflation too, with fresh data to be released in the UK this week.
ANZ/Roy Morgan weekly consumer confidence.
REINZ Housing Market data for December
NZ Westpac Consumer Sentiment for January
Westpac/Melbourne Institute Consumer Sentiment for January
Australian Bureau of Statistics Labour Force Report for December
CBA Household Spending Intentions Index for December
Holiday – Martin Luther King, Jr. Day
January New York Empire State Manufacturing Index
Building Permits, MoM
Philadelphia Fed Manufacturing Index for January
Weekly Initial Jobless Claims
Existing Home Sales, MoM
BoJ Interest Rate Decision, Monetary Policy statement
BoJ Quarterly Outlook Report
Trade Balance for December
December CPI inflation
BoJ Minutes of December meeting
December Eurozone inflation (Core, Headline CPI)
November UK Unemployment rate
ECB Current Account
December Eurozone Core CPI
Speech, ECB policymaker Francois Villeroy de Galhau
December UK Core Retail Sales MoM
December Eurozone Consumer Confidence
(sources: Refinitiv, Iress, Commsec and Investing.com)
According to the ASX, these companies are set to make their debut this week. All entries are subject to change, Covid-19, life.
Beforepay Group (ASX:B4P). Beforepay operates in the Pay on Demand industry – a relatively new concept, which looks to provide individuals with early access to their upcoming pay, or “cashflow management support”. $35m at $3.41.
Belararox Limited (ASX:BRX). A resources explorer with a focus on developing the Belara Project and the Bullabulling Project tenements located in NSW and Western Australia, raising $6m at 20c
Felix Gold (ASX:FXG), minerals explorer with a focus on gold. $10m at 20c.
Vertex Minerals (ASX:VTX), minerals explorer with a gold focus in WA. $5.5m at 20c.
Killi Resources (ASX:KLI). Gold and copper digger, owns four major exploration projects in Western Australia and Queensland. $6m at 20c
ChemX Materials (ASX:CMX). The company’s main business is the development of projects and processes to produce materials in high demand in new energy and technology markets. It raised $8m at 20c.
WA1 Resources (ASX:WA1), a copper focused exploration company with three projects located in Western Australia. $6m at 20c.
Far East Gold (ASX:FEG), a mineral explorer that raised $12m at 20c.
NICO Resources (ASX:NC1), a mineral explorer that raised $12m at 20c.
Orexplore Technologies (ASX:OXT), a minerals and mining technology provider. $2.5m at 20c.
Viridis Mining (ASX: VNM), minerals exploration firm, $5.5m at 20c