Australia, New Zealand and China Update

Key events in Australia, New Zealand and China. What to Watch, week commencing 14 July


  • Australia: Light data week; RBA Minutes Tuesday, RBA’s Edey on speaker’s panel Thursday
  • NZ: Q2 CPI Wed, weekly dairy auction (steadier?). PSI, Job Ads, consumer sentiment and possibly REINZ June housing report
  • China: Key activity reports Wednesday – Q2 GDP, June retail sales, industrial production, fixed assets investment, property prices
  • US: A big week with Fed Chair Yellen’s Semi-annual testimony to the Senate/ House on Tues/ Wed and the Beige Book Wed. Fed presidents Fisher and Bullard are speaking Wed/Thurs. For data, Retail sales, PPI, Industrial production, NAHB Housing index, Housing starts/ building permits, Philly Fed, and Consumer Sentiment all due
  • Europe: Industrial production, Draghi testimony to EU Parliament, ZEW Survey, CPI, Trade
  • UK: CPI, House prices, and Claimant count/ employment/ earnings report scheduled.


It’s a quieter week ahead for data – very quiet in fact – with the quarterly and more detailed NAB Business Survey (Q2) out Thursday. In addition to the larger sample estimates of the main metrics such as Business Confidence and Conditions, there are additional questions such as the outlook for business capital expenditure. Motor vehicles sales for June are out Tuesday and two leading indexes out Wednesday/ Thursday.

The main interest will be in the RBA July Board Minutes being released on Tuesday. This could well have been a trigger now knowing the RBA’s continued concern over the $A and that it’s been nowhere close to thinking about hiking rates, outlined by Governor Stevens in his post July Board Economic Update speech. Even so, the Minutes may well throw some more light on Board commentary and views on the economy’s progress and its transition. The RBA’s Malcolm Edey (Assistant Governor, Financial Markets) is a panel member at a market and regulation symposium on Thursday.

New Zealand:

We expect Wednesday’s NZ Q2 CPI increased 0.4% (rounded down from our previously published view of 0.5%, given the slight undershoot in Friday’s Food Price Index and our finalised risk tweaks). A quarterly 0.4% would lift annual CPI inflation to 1.8%, from 1.5% – so within spitting distance of the 2.0% mid-point of the RBNZ target. There are no published polls out, as we write. But, for reference, note the Reserve Bank, in its June MPS, estimated a 0.3% increase in the Q2 CPI, for annual inflation of 1.7%, which would seem a relatively low hurdle to stumble under.

Regarding dairy export prices, we still think they have a bit further to fall yet, but are becoming a bit more cautious on the extent and timing of it, given how far prices have fallen to date. But even if outcomes at Wednesday morning’s GDT auction show some stability it would not alleviate the broader downward pressure on Fonterra’s current milk price forecast that has formed over the last month or two, particularly in light of the increasing heights in the NZD.

As for the coming week’s monthly NZ data reports; Monday’s PSI will be checked for any further slowdown (it having drifted down to 54.2 in May); Thursday morning’s ANZ job ads will most likely rebound from May’s overdue correction to the downside; while Thursday afternoon’s ANZ-RM consumer confidence index could reasonably go either way, from the solid 131.9 level it crept back up to in June. All the while, we are keeping an eye out for the REINZ housing results for June.


It’s the week of June quarter GDP and June month retail sales, industrial production, and fixed asset investment. All set for release at midday on Wednesday.

China’s GDP growth is expected to remain steady at a year-to growth of 7.4%, stability helped by recent selective policy stimulus to consolidate the economy’s progress. Likewise, year-to growth rates of the June month activity indicators are expected to be steady to a little higher: retail sales steady at 12.5%, industrial production up to 9.0% from 8.8% while annual year-to date average growth in fixed assets investment steady at 17.2%.

Property prices for June are due on Friday and should show some further slowing in price momentum across the country. Finally, if money supply, new yuan loans and aggregate financing volumes for June are not released today (Friday), they’ll be expected in the first part of the week ahead.