Share Coverage
Send to KindleCategory: Business, Economics and Finance / Consumer Finance
Jobs growth continues but markets look rocky
Sunday, 11 Sep 2016 08:17:12 | Stephen Letts
Pedestrians are reflected in the window of the Australian Securities Exchange (ASX) next to a board displaying stock prices in Sydney on September 24, 2014. (Reuters: David Gray)
Get set for an ugly start to the week with the ASX/SPI 200 futures pointing to an avalanche of sell orders on Monday morning, following a sudden capitulation on Wall Street on Friday.
The S&P500 tumbled 2.5 per cent — its largest fall since the Brexit vote in late June — as betting shortened on another rate hike from the Federal Reserve.
The sentiment was not helped by a sharp decline in oil prices — down almost 4 per cent — as it dawned on traders that a big fall in US inventories was a temporary matter caused by bad weather and in fact the world was still awash with the stuff.
The markets' realisation that ineffectual low-to-negative interest rates were losing popularity with central bankers saw US 10-year bond yields jump as did the US dollar, while German 10-year bond yields climbed above zero for the first time in a couple of months.
Markets on Friday's close:
- ASX SPI 200 futures: -1.5pc at 5,246
- AUD: 75.38 US cents, 67.12 euro cents, 56.76 British pence, 77.41 Japanese yen, $NZ1.028
- US: Dow Jones -2.1 pc at 18,085 S&P500 -2.5pc at 2,128 NASDAQ -2.6pc 4,682
- Europe: FTSE -1.2pc at 6,777, DAX -1pc at 10,574 Eurostoxx50 -1pc at 3,053
- Commodities: Brent oil -3.7pc at $US48.01/barrel, Gold -0.8pc at $US1,328/ounce, Iron ore +0.1pc at $US57.50/tonne
All in all, the market looks ripe for a correction.
"We have seen very strong gains from the February and post-Brexit lows that left markets overbought with short term measures of volatility suggested a degree of complacency," AMP Capital head of Investment Strategy Shane Oliver wrote in a weekend note.
"We are now in a seasonally weak period of the year and there is significant event risk ahead with the Fed, Italy, the US election and of course South China Sea tensions and North Korean missile/bomb tests don't help.
"So, the correction could have further to run in the short term."
Temporary census work to support jobs growth in August
Locally the focus of the week will be labour force data (Thursday) with a spurt in jobs growth — albeit temporary — driven by last month's census.
Following July's stronger than expected gain of 24,000 jobs, Citi economists are forecasting an even stronger 30,000 new jobs in August.
Citi's Paul Brennan said this did not reflect a new bullishness in his forecasts, but the observation that the Bureau of Statistics put on an extra 40,000 temporary census workers during the month.
On this basis Citi is forecasting unemployment may edge down a notch to 5.6 per cent.
A figure of around 15,000 new jobs — which is the consensus view — would be enough to hold unemployment at 5.7 per cent.
The NAB trots out its business conditions and confidence surveys for August on Tuesday, which are expected to hold at their current fairly solid level, while Westpac's monthly reading of consumer confidence on Wednesday is expected to be little changed as well.
China to focus on infrastructure investment, retail sales
China's National Bureau of Statistic pumps out its important monthly readings on fixed asset investment (FAI), industrial production and retail sales on Tuesday.
It is a batch of numbers that have been disappointing for months, particularly FAI, which is considered a reasonable proxy for infrastructure and property investment.
FAI may slow again as the spending by State Owned Enterprises seems to be drying up after a fiscal splurge earlier in the year, while industrial production is tipped to be flat, as are retail sales.
However, a recent pick-up in imports — the first rise since 2014 — and stabilised manufacturing figures could deliver better than expected results.
US retail sales to rebound
US consumers grab the global spotlight with details about what they bought and how much more they paid for it in August being released.
Retail sales are expected to show a modest bounce after a pretty soft, no-growth July, while core inflation is expected to have remained at its sluggish annual pace of around 2.2 per cent.
One of the most interesting diary entries is a speech from influential Federal Reserve governor Lael Brainard on Monday.
She is regarded as one of the most dovish members of the Fed and if she starts shifting her stance, expect betting a rate hike this year to tighten even more.
Australia
| Monday 12/9/16 | Lending finance Credit & debit card lending | Jul: ABS data on home, personal & business lending Jul: RBA data on use of credit and debit cards |
| Tuesday 13/9/16 | Business conditions RBA speech Consumer confidence | Aug: NAB series of conditions and confidence, post election Asst governor Christopher Kent speaks ANZ weekly series |
| Wednesday 14/9/16 | Consumer confidence | Sep: Westpac monthly series |
| Thursday 15/9/16 | Labour force RBA bulletin New motor vehicles | Aug: Unemployment should be steady at 5.7pc Quarterly publication of RBA thoughts Aug: Slipped in July but up 1.6pc over the year |
| Friday 16/9/16 | Leading index | Aug: Westpac series, has been slowing |
Overseas
| Monday 12/9/16 | CH: Foreign direct investment US: Fed Reserve speech | Aug: Expected to rise again after a fall in July Influential Fed member Lael Brainard speaks |
| Tuesday 13/9/16 | US: Federal budget US: Business confidence CH: Investment, industrial & retail | Aug: Monthly update of budget position Aug: NFIB series focuses on small business Aug: Monthly release of key infrastructure investment, industrial production and retail sales |
| Wednesday 14/9/16 | UK: Unemployment EU: Industrial production | Jul: Around 5pc Jul: May edge up but still less than 1pc over the year |
| Thursday 15/9/16 | US: Retail sales US: Industrial production US: Producer prices UK: Retail sales UK: BoE decision EU: Inflation | Aug: May have lifted Aug: Expected to be flat Aug: Key indicator of inflation, still flat Aug: Forecast to decline Rates expected to be on hold Aug: Only around 0.2pc over the year |
| Friday 16/9/16 | US: Inflation US: Consumer confidence | Aug: Core inflation at around 2.2pc over the year Aug: Has been on the slide since May |
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
