Trader’s Diary: Everything you need to get ready for the week ahead
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Last week saw the US stock markets (S&P 500 and Nasdaq) reaching record highs, as well as the release of several important announcements and economics data.
The early part of the week was headlined by US Fed Chairman Jerome Powell’s keynote address at the Jackson Hole economic policy symposium.
Powell once again dismissed inflationary pressures as just transitory, and said that a rate hike was a distant prospect.
He did say that tapering (the easing of US treasuries buyback program) is coming, but would not say when. Most analysts agree that it will begin at the end of this year.
All data is indeed pointing to a recovery in the economy, and last Friday’s strong US jobs print offered yet another proof. The US unemployment benefit claims fell in August by 14,000 – its lowest level since the start of the pandemic.
It would be interesting to see what a rate hike scenario would do to commodity prices like uranium, which has just hit a six-year high.
Across the Atlantic, the story was all too similar, with last week’s data showing Eurozone inflation rising to 3%, a 10-year high.
Back home in Australia, a couple of important data stats were released last week.
Our GDP in the last quarter was growing at +0.7%, beating market expectations of +0.3%. Meanwhile, property prices across the country have cooled down, and only increased by 1.5% in August.
The RBA will convene for its September meeting on Tuesday, and the expectation is for the central bank to maintain status quo with regards to interest rates and its bond purchase tapering schedule announced last month.
However it would be interesting to see what the RBA’s governor Philip Lowe’s thoughts are on inflation and Australia’s property market.
TUESDAY: The RBA’s interest rates decision will be released. In its previous meeting in August, the RBA said it was watching both the housing and mortgage markets closely but decided to leave the prime rate intact at 0.1%, and no change to its QE/tapering stance.
WEDNESDAY: The US consumer credit data for July will be released (US time). Total consumer credit in the US grew at the fastest rate ever in June, where US$37.69 billion was spent on credit cards and other credit facilities. The market expects this to decrease to US$25 billion in July.
US job vacancies data will also be watched closely on Wednesday. June’s figures came in at 10 million openings, but that’s expected to be reduced to 9.3 million in July.
MONDAY: The Eurozone Investor Confidence Index is an important sentiment gauge. The market is expecting an improved index compared to six months ago.
TUESDAY: Employment data will be released, with economists predicting Eurozone jobs to have declined by 0.3% during the quarter, vs an increase of 0.5% in the previous quarter.
THURSDAY: Most importantly, the ECB interest rates decision will be released this Thursday, where the Euro central bank is expected to maintain the rate at 0%.
TUESDAY: The Chinese export and import data are to be released. This will be a good gauge of economic activities not only in China, but also globally.
WEDNESDAY: That will be followed by the Chinese CPI data. Previous data for August was 0.3%, but the market is expecting a lower figure of 0.2% this time around.
MONDAY: HomeCo (ASX:HMC)’s HealthCo Healthcare and Wellness REIT (real estate investment trust) is set to make its ASX debut. The REIT has been seeded with a number of assets including Health Hub Morayfield (Queensland), private oncology assets, and a private hospital in Camden.
Companies to issue their annual reports this week include: