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Free AccessWeek Ahead for China, Japan, Australia, New Zealand
SYDNEY (MNI) - BANK OF JAPAN
There are no public speeches by BOJ board members until Aug. 31, when
Takako Masai speaks to business leaders in Matsuyama City, western Japan. The
BOJ's next policy meeting is scheduled for Sept. 20-21.
JAPANESE DATA
On Tuesday, the Cabinet Office releases the Economy Watchers' Survey for
July. In June, the Watchers sentiment index for the current economic climate
posted the third straight month-on-month rise, up 1.4 points at 50.0. The
relatively dry rainy season supported retail sales while new models continued to
draw automobile demand. Solid investment by cable TV networks in 4K and 8K
resolution delivery infrastructure was also reported. The outlook index showed
sentiment regarding the next two to three months also continued to rise in June,
up 0.9 point at 50.5, the third straight gain.
On Thursday, the Cabinet Office releases June machinery orders, a leading
indicator of business investment. The MNI median forecast: core private-sector
orders, which exclude volatile orders for power generation equipment and ships,
+4.5% on month (forecast range: +1.1 to +7.0%) for the first m/m rise in three
months vs. -3.6% in May.
Also Thursday, the BOJ releases the July corporate goods price index
(CGPI). Producer prices have been supported by a recent pickup in global energy
and commodity prices, although fuel prices have shown month-on-month drops. The
MNI median forecasts: +2.3% y/y vs. +2.1% in June; +0.2% m/m vs. unchanged in
June.
JAPANESE GOVERNMENT BONDS
Japanese financial markets are closed Friday for the Mountain Day public
holiday.
Downward pressure on Japanese government bond yields may increase
temporarily, depending on developments in overseas markets. But a sharp drop in
JGB yields is unlikely as investors stand ready to take profits on higher
prices. JGBs are supported by the BOJ's outright bond purchase operations, which
are expected Wednesday and Thursday.
The 10-year JGB yield is seen moving between 0.055% and 0.080% this week
against the bank's target of around zero. The Ministry of Finance will auction
Y800 billion of 30-year bonds and Y2.6 trillion of six-month Treasury discount
bills Tuesday and Y4.4 trillion of three-month Treasury discount bills Thursday.
CHINA
On Monday, the People's Bank of China is due to release foreign exchange
reserves data for July, time uncertain. Reserves increased $3.22 billion to
$3.0567 trillion in June, the fifth consecutive monthly increase but the lowest
monthly growth since August 2014.
On Tuesday, July trade data are expected to be released in the morning.
Imports grew 17.5% year-over-year, according to the median forecast of an MNI
survey, compared with 17.2% growth in June. Exports grew 10.8% y/y, according to
MNI survey, slowing from 11.3% growth in June. The trade surplus is estimated to
have risen to $46.6 billion from $42.8 billion.
On Wednesday, the National Bureau of Statistics is due to release the
consumer and producer price indexes for July, with both expected to rise
slightly. The CPI is expected to accelerate slightly to 1.6% in July from 1.5%
y/y in June, according to the median of an MNI survey. The PPI will rise to a
5.6% rate from 5.5% the month before.
Sometime between Thursday, August 10 and Tuesday, August 15 the PBOC is
expected to release data on new bank lending and money supply growth for July.
The M2 money supply growth rate is projected to have accelerated slightly to
9.5% from the all-time-low rate of 9.4% in June. New loan growth last month is
seen slowing to CNY800 billion, only half the CNY1.54 trillion gain in June,
while total social financing likely increased CNY1.075 trillion, well below the
CNY1.78 trillion rise the month before, according to the median forecast of the
MNI survey.
AUSTRALIA
It's a busy week where the highlight is the RBA's cash rate decision on
Tuesday, followed by full Statement on Monetary Policy three days later.
Monday begins with data on private sector credit for June published by the
RBA where MNI median forecast is for 0.4% m/m rise, the same pace as May. Of
more interest is the data on housing credit where investor mortgages are slowing
but owner-occupier mortgages have been showing a slight acceleration.
On Tuesday is AI Group's performance of manufacturing index for July which
is expected to show another month of expansion (last 55.0). There's also ANZ-Roy
Morgan's weekly consumer confidence data, followed by monthly house price index
by Core-Logic where expectation is for around 1.7% m/m increase in July compared
with +1.8% for June. In the afternoon is RBA's cash rate decision where the
unanimous view of both economists and market is for the rate to be left
unchanged at 1.5%. There will be increased focus on the statement this time
given the recent appreciation in the exchange rate. Later in the afternoon is
index on commodity prices for July published by the RBA (last -4.3%).
On Wednesday is dwelling approvals data for June where MNI median forecast
is for 1.5% m/m rise, a part-rebound from a 5.6% fall in May.
On Thursday AI Group publishes performance of services index for July which
is also expected to show the expansion continuing (last 54.8). Later Thursday is
international trade data for June where MNI median forecast is for a surplus of
A$1.7 billion which is lower than a surplus of A$2.5 billion for May.
On Friday the RBA publishes quarterly Statement on Monetary Policy which
will be keenly watched for any change in forecasts on growth and inflation given
assumption of market pricing for cash rate hike and recent rise in the exchange
rate. Market will also be looking for more commentary on the currency. Also
Friday is retail sales data for June where MNI median forecast is for a small
0.1% m/m rise in sales, slowing from a 0.6% growth in May. Retail sales for Q2
will be also be published which is expected to show a 1.3% q/q rise, a sharp
acceleration from just 0.1% in Q1.
RBA
Data during the week includes private sector credit, RBA's cash rate
decision, index of commodity prices and quarterly Statement on Monetary Policy.
NEW ZEALAND
The highlight of the week is labor market statistics for Q2 due on
Wednesday. MNI median forecast is for 0.9% q/q gain in employment but also a
rise in the labor participation rate to a record high of 70.7% which is expected
to keep jobless rate unchanged at 4.9%. Labor cost index is expected to rise
0.4% q/q in Q2, the same pace as Q1.
Other data releases during the week include building consents for June on
Monday which is expected to show a decline after 7.0% m/m rise in May. Also
Monday is ANZ's monthly business survey which is expected to show both
confidence and activity outlook at elevated levels.
RBNZ
No major data or event is due from the RBNZ
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.