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1 Jun 2015
Busy calendar in Asia: Aus data, China PMIs - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, breaks down the key events for Monday, WITH main focus of the busy Australian calendar, as Sean notes, on dwelling approvals, company profits and inventories, while in China, manufacturing data will also be released.
Key Quotes
"The main focus of the busy Australian calendar will be dwelling approvals, company profits and inventories, all released at 11:30am Syd/9:30am Sing/HK. Dwelling approvals rose 2.8% in Mar, continuing to be driven by large high-rise apartment projects. There is a large downside risk of a ‘gap’ in the project pipeline, but this has not happened so far. Westpac’s forecast is for a 2.0% fall in Apr, consistent with a flattening trend, and is a little lower than the -1.8% consensus. Westpac is expecting Q1 company profits to edge up to 0.6%q/q, while the market is forecasting a flat print. Mining profits have been cushioned by the drop in AUD and should rise slightly in Q1. Non-mining profits stalled over the past year but should be supported by lower global energy costs. Q1 inventories should stabilise after a sharp Q4 rundown. We are expecting a 0.1% q/q increase, in line with the market. A bounce in imports should be supportive of inventory building. These reports tend to have only a modest impact on AUD."
"We will see the official China May manufacturing PMI at 11am Syd/9am local, ahead of the final reading of the HSBC manufacturing PMI. The flash PMI print suggests a modest positive; the consensus is for a rise from 50.1 to 50.3. Japan Q1 capital spending will be out at 9:50am Syd/8:50am local, and will have implications for the second estimate of GDP."
"In the US we will see the April personal income and spending data, with most interest in the Fed’s preferred inflation measure, the core PCE deflator. This is expected to have risen 0.2% m/m, 1.3% y/y. The 0.3% rise in the April CPI had considerable market impact so if core PCE matches March’s 0.1% gain, USD could take a notable hit. The May ISM manufacturing survey is expected to improve from 51.5 to 52.0. April construction spending is seen rebounding 0.7% after -0.6% m/m in March."
Key Quotes
"The main focus of the busy Australian calendar will be dwelling approvals, company profits and inventories, all released at 11:30am Syd/9:30am Sing/HK. Dwelling approvals rose 2.8% in Mar, continuing to be driven by large high-rise apartment projects. There is a large downside risk of a ‘gap’ in the project pipeline, but this has not happened so far. Westpac’s forecast is for a 2.0% fall in Apr, consistent with a flattening trend, and is a little lower than the -1.8% consensus. Westpac is expecting Q1 company profits to edge up to 0.6%q/q, while the market is forecasting a flat print. Mining profits have been cushioned by the drop in AUD and should rise slightly in Q1. Non-mining profits stalled over the past year but should be supported by lower global energy costs. Q1 inventories should stabilise after a sharp Q4 rundown. We are expecting a 0.1% q/q increase, in line with the market. A bounce in imports should be supportive of inventory building. These reports tend to have only a modest impact on AUD."
"We will see the official China May manufacturing PMI at 11am Syd/9am local, ahead of the final reading of the HSBC manufacturing PMI. The flash PMI print suggests a modest positive; the consensus is for a rise from 50.1 to 50.3. Japan Q1 capital spending will be out at 9:50am Syd/8:50am local, and will have implications for the second estimate of GDP."
"In the US we will see the April personal income and spending data, with most interest in the Fed’s preferred inflation measure, the core PCE deflator. This is expected to have risen 0.2% m/m, 1.3% y/y. The 0.3% rise in the April CPI had considerable market impact so if core PCE matches March’s 0.1% gain, USD could take a notable hit. The May ISM manufacturing survey is expected to improve from 51.5 to 52.0. April construction spending is seen rebounding 0.7% after -0.6% m/m in March."