Weekly Reports | Dec 02 2011
By Greg Peel
You'd better not shout, pout or cry because you know who might be coming to town. At least that seems to be the growing feeling among commentators. Realistic? Or is it a case of, as CNBC beautifully put it on Wednesday, markets being on a new drug called hopium?
Angela Merkel will address the Bundestag tonight and will continue to sell the plan for closer fiscal union and central control in the eurozone ahead of the EU summit at the end of next week. The ECB is on side, suggesting financial support measures can be forthcoming once such a union is in place. Are we now moving towards something definitive, or is this latest “plan” (albeit not a new one) going to bring yet another false dawn over Europe and the global financial markets?
Time will have to tell, because fiscal union will not be achieved before Christmas. In the interim, market movements will depend on whether confidence grows that this time it might be real.
Before then we have to get past tonight's US jobs number, otherwise know as Job Lotto. Moving into next week it's a quieter week for US data, with Monday's service sector PMI the highlight before the monthly trade balance on the Friday. Monday is also service PMI day for Australia, China, Europe and the UK.
The eurozone will see another revision to its September quarter GDP next week while both Germany and the UK will provide industrial production numbers. Both the ECB and Bank of England will make rate decisions on Thursday and another cut from the ECB is widely tipped.
China will provide a monthly data dump on Friday, with inflation numbers the highlight.
It's GDP week in Australia next week, with the September quarter result due on Wednesday. Ahead of the release we'll see quarterly company profits and inventory numbers along with the current account. ANZ job ads and an ABARES crop forecast are also due.
The RBA will have to make a rate decision on Tuesday and while most economists had expected the central bank to hold off until next year, this week's coordinated policy loosening from the world's major central banks will make a December rate cut more likely. Europe is the swing factor for the RBA and the global move reflects a deterioration. Australia doesn't want to be left as a shag on the policy rock.
For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.