25 Feb 2015
What to expect from RBNZ Governor Wheeler? - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, shares his view on the key events for the day ahead, noting RBNZ Governor Wheeler, Australian data, China HSBC PMI, and the return of the Chinese market after the lunar new year holiday period.
Key Quotes
"RBNZ governor Wheeler testifies to a parliamentary committee from 10:40am Syd/7:40am Sing/HK. Question time is more significant and typically goes beyond the scope of the annual report - likely to get something on monetary policy, QE, FX intervention, and the LVR policy. The latter in particular is worth watching for - note that the annual report was released last October (and was written in August), back when they were still talking about the timing of removal of the LVR limits. Clearly their thinking has shifted since then and there's a risk we get some genuinely new comments on the matter today."
"In Australia we have both the Q4 wage price index and construction work done released at 11:30am Syd/8:30am Sing/HK. Our forecast for wages growth is at 0.6%, in line with the market median. There are chances of a downside surprise, given cost consciousness in the private sector and the public sector trying to consolidate its balance sheet. The Westpac forecast for construction work is at -1.3%, compared to the -1.0% consensus. Construction work is expected to continue its downward trend, with the downturn in mining investment driving declines in the private sector and public works also soft at present."
"Chinese markets return from the lunar new year holiday with two releases on the calendar at 12:45pm Syd/10:45am local. The market is expecting Feb flash HSBC manufacturing PMI to tick lower to 49.5 from 49.7, with manufacturing still subdued, though this number will be affected by lunar new year. The Feb Westpac-MNI consumer sentiment survey will give us another update on housing, jobs, spending and other signs the economy may be picking up, with the benefit that sentiment surveys do not tend to be as affected by seasonality."
In the US we will see Jan new home sales. This is expected to fall 2.3% m/m after an 11.6% rise in Dec. The NAHB survey weakened in Jan, and the weather has not helped. Risks are also to downward revisions of Dec data, given the tendency of this series to lower previous estimates. Fed chair Yellen will appear in front of a House committee from 10am NY, with interest in the lengthy Q&A session (if anything, the questions from the politicians will be even nuttier than in the Senate) but probably only modest or no market impact.
Key Quotes
"RBNZ governor Wheeler testifies to a parliamentary committee from 10:40am Syd/7:40am Sing/HK. Question time is more significant and typically goes beyond the scope of the annual report - likely to get something on monetary policy, QE, FX intervention, and the LVR policy. The latter in particular is worth watching for - note that the annual report was released last October (and was written in August), back when they were still talking about the timing of removal of the LVR limits. Clearly their thinking has shifted since then and there's a risk we get some genuinely new comments on the matter today."
"In Australia we have both the Q4 wage price index and construction work done released at 11:30am Syd/8:30am Sing/HK. Our forecast for wages growth is at 0.6%, in line with the market median. There are chances of a downside surprise, given cost consciousness in the private sector and the public sector trying to consolidate its balance sheet. The Westpac forecast for construction work is at -1.3%, compared to the -1.0% consensus. Construction work is expected to continue its downward trend, with the downturn in mining investment driving declines in the private sector and public works also soft at present."
"Chinese markets return from the lunar new year holiday with two releases on the calendar at 12:45pm Syd/10:45am local. The market is expecting Feb flash HSBC manufacturing PMI to tick lower to 49.5 from 49.7, with manufacturing still subdued, though this number will be affected by lunar new year. The Feb Westpac-MNI consumer sentiment survey will give us another update on housing, jobs, spending and other signs the economy may be picking up, with the benefit that sentiment surveys do not tend to be as affected by seasonality."
In the US we will see Jan new home sales. This is expected to fall 2.3% m/m after an 11.6% rise in Dec. The NAHB survey weakened in Jan, and the weather has not helped. Risks are also to downward revisions of Dec data, given the tendency of this series to lower previous estimates. Fed chair Yellen will appear in front of a House committee from 10am NY, with interest in the lengthy Q&A session (if anything, the questions from the politicians will be even nuttier than in the Senate) but probably only modest or no market impact.