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Australia and NZ data and event previews 07.12.09

Australia and New Zealand - economic data and event previews

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ANZ job advertisements (%m/m, Nov.) - Job ads probably fell slightly in November, after slipping 1.7%m/m in October, which was the first fall in three months. A deterioration in business confidence means firms probably would have been less inclined to advertise for new staff

NAB business confidence (Index, Nov.) - The NAB survey of business confidence probably slipped 3pts to 13 in November, owing to consecutive RBA rate hikes (the RBA added a third hike last week) and uncertainty surrounding the Federal government’s contentious climate change legislation (which, by the way, the Senate rejected last week).

Aust. current account balance (A$bn, 3Q) - The current account deficit should have widened in 3Q. The wider deficit will owe primarily to a fall in exports, although imports increased over the quarter. The September quarter will mark the second straight quarter in which the trade balance has been in deficit.

RBA Governor Stevens’ speech - The Governor’s speech to the annual Australian Business Economists’ conference dinner is the policy highlight of the week. The Governor will speak on the economy and take questions from the floor. The tone of the Governor’s speech is unlikely to deviate from last week’s statement although, hopefully, there will be clues on how quickly the remaining policy accommodation will be withdrawn in 2010.

Westpac-MI consumer confidence survey (%m/m, Dec.) - History shows that consumer confidence usually is resilient at the start of a hiking cycle, then deteriorates as interest rate increases start to hurt. The Westpac-Melbourne Institute consumer confidence index should fall 6%m/m in December; the responses were collected after the RBA’s third straight rate hike.

Aust. housing finance (%m/m, Oct.) - The total number of home loans issued probably fell 3% over the month. First home buyer demand, in particular, should have pulled back from September—the expanded government grants to this group were scaled down in October and the RBA hiked the cash rate for the first time.

Aust. international trade (A$bn, Oct.) - Preliminary data showed that good imports fell 2%m/m in October. With our forecast for exports to rise, the trade deficit should have narrowed to A$1.3 billion.

Aust. unemployment rate (%, Nov.) - We expect a partial reversal of recent solid employment gains. Our forecast calls for 15,000 jobs to have been shed last month, following a rise of 65,000 over the preceding two months. With a small drop in the participation rate, the unemployment rate probably will rise one tenth of a percent to 5.9%.

New Zealand

RBNZ official cash rate announcement (%) - The RBNZ this week will likely leave the cash rate steady at 2.5% and maintain that the OCR will remain at current levels until the second half of 2010, mainly because the recovery in New Zealand remains fragile. We expect the tone of the RBNZ’s commentary to be balanced, with the statement leaving in place the implied neutral bias installed last time around. Housing market activity and household spending have picked up, but other economic indicators have deteriorated, such as consumer confidence and employment.

NZ terms of trade (%q/q, 3Q) - The terms of trade should have fallen in 3Q for the seventh straight quarter. The 2.6%q/q fall will be mild in comparison the falls in previous quarters, with the terms of trade already having fallen 19% this year.


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