FYI | Mar 05 2007
By Greg Peel
It’s going to be a long and volatile week in the US, with some of the most significant economic data not due out until Friday.
Friday sees the release of non-farm payrolls for February, which is the major benchmark for wage inflation. This will be accompanied by average earnings and the unemployment rate for February, as well as the all-important trade balance for January. These numbers will provide a snapshot of just where the US economy is heading, and should spark more speculation on the next move in interest rates.
Leading up to Friday we will see the ISM non-manufacturing index tonight, non-farm productivity, pending home sales and factory orders on Tuesday, and consumer credit on Wednesday.
Europe will learn of the Eurozone fourth quarter GDP on Tuesday, and both the European Central Bank and Bank of England will make interest rate announcements on Thursday.
We will also learn of Australia’s interest rate plight on Wednesday, although consensus is strongly in favour of no move either way. This is not the case for New Zealand however, with the market expecting a 0.25% hike to 7.5% on Thursday.
(This raises an interesting prospect of New Zealand being saviour to the world. One of the most popular yen carry trades is into NZ bonds, and while fears are that Japan may raise rates above the 0.5% level to scare the bejesus out of carry traders, if NZ raises as well then all is perhaps forgiven. While one wouldn’t expect a squadron of hedge fund traders to don the Rising Sun headband and come screaming in out of the clouds crying Uridashi! Uridashi! Uridashi!, at least it might take the heat off perhaps some of the carry trade panic.)
Australia will also enjoy some other interesting data this week. We kick off today with the February Commonwealth Bank-AiG performance of services index and the TD Securities-Melbourne Institute inflation gauge. The latter should provide Stephen “Kooky” Koukoulas with a good excuse for a rave. Fourth quarter business indicators, company profits and non-farm inventory measures are also due out today.
Tuesday sees fourth quarter government spending, January building approvals and the January trade balance. Wednesday will give us fourth quarter GDP (and no rate change). Friday provides January housing finance.
Strap yourself in.
