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Whats been happening in economies of interest so far this week?

Written by Sam Coxhead on October 20th, 2011.      0 comments

4:50 PM (NZT)
The Australian Economy:
The week has been thin on meaningful economic data in Australia. The focus so far has been the release of the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes on Tuesday. Hardly of surprise, they show the RBA remain poised to act, should the softer global economic outlook come to reality. Next week’s quarterly inflation numbers will now be the focus from the domestic point of view. An upside surprise in this number would certainly force the interest rate market to back pedal on its pricing of cash rate cuts in the coming months.
The European Economy:
Tensions in Europe continue this week. There has been a watering down of the positive sentiment that had surrounded the upcoming EU summit on Sunday. It was hoped the extensive details of a French and German plan would be announced, but various officials have now moved to limit the disappointment, when these plans are actually announced. To what extent the initiatives will go, remains to be seen, however it can be assumed that all plans will take time to action. Various credit agency downgrades continue to come at both bank and sovereign levels. The economic data in Europe remains weak and further downward revisions of growth forecasts have come this week.  Ahead of Sunday the current state of market paralysis should continue.
The US Economy:
The US economy continues to show signs of a bounce back from the disappointing economic data releases in August. The numbers this week have beaten expectations for the most part. Even the beleaguered housing market is seeing an uptick in activity. Inflationary pressure remains under control, with the core number coming in for the month at +.1%. Tomorrow’s Philadelphia Fed Manufacturing Index (one of the key US  indexes watched by the markets), will be the focus for the remainder of the week.  
The New Zealand Economy:
The domestic economic focus has been limited so far this week. In the absence of any significant data, the focus has been on the offshore markets. However next week sees the New Zealand economy back in the spotlight, with inflation numbers on Tuesday, business confidence numbers Wednesday, and the Reserve Bank set to make their latest monetary policy announcement at 9:00 AM (NZT) on Thursday.
The Canadian Economy:
The Canadian economy has been somewhat off the radar so far this week, with just the Bank of Canada Business Outlook Survey released of note. The survey showing business sentiment has dropped a little from the previous release. This is not surprising, given the weaker outlook globally. Importantly the inflation numbers on Friday will give the market a better idea about potential interest rate policy changes in 2012.
The Japanese Economy:
This week has little in the way of economic data due for release in Japan. The strength of the YEN remains a primary concern, although no unconventional methods to weaken its strength have been released. Speculation that the Bank of Japan (BOJ) would adopt a Swiss like cap on the level of the YEN has lessened. The BOJ and Ministry of Finance have joined forces and setup a team to monitor the strength of the currency. Whether or not something more concrete comes of this move remains to be seen. Next week sees the retail sales number released on Thursday, ahead of the BOJ monetary policy announcement. Given the speculation of late, this will be very closely watched.