Events that marked the week:
There were no data releases from Australia during the week, but from China CPI and PPI figures were released. China's consumer inflation remained modest in April, while producer prices' four-year slump moderated as commodity prices rebounded, easing concerns about deflationary risks to the world's second-largest economy. Strong March data had raised hopes the economy was bottoming out from a prolonged slump -- possibly allowing the People's Bank of China (PBOC) to take its foot off the gas -- but mixed April data so far and surging debt levels have fueled doubts about whether any recovery will prove sustainable.
The consumer price index (CPI) rose 2.3% in April from a year earlier, largely due to a spike in food prices, particularly pork. The reading has now been at the same level for three months in a row, and April defied market expectations for a slight pick-up in inflationary pressures. Non-food prices rose just 1.1%, ticking up from March, but again not showing a build in price pressures that would be expected if the broader economy was suddenly perking up.
Producer price trends in April were more encouraging, with price declines easing to 3.4% from a year earlier, less than the 3.8% economists had forecast and a fall of 4.3 % in March. On a sequential basis, the producer price index (PPI) rose for the second month in a row.
On Wednesday Home Loans data was released. The trend estimate for the total value of dwelling finance commitments excluding alterations and additions was flat. In seasonally adjusted terms home loans fell by 0.9%, beating forecasts on 1.4% decrease. Investment housing commitments rose 1.1% while owner occupied housing commitments fell 0.7%. In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 0.2%. In trend terms, the number of commitments for owner occupied housing finance fell 0.2% in March 2016.
This week markets will be looking at:
Monetary Policy Meeting Minutes (Tuesday 3:30)
Wage Prices (Wednesday 3:30)
Employment Change/Unemployment Rate (Thursday 3:30)
