(CEP News) - The release of Australia’s first-quarter inflation results will be the main event next week. There will also be speeches by Governor Glenn Stevens of the Reserve Bank of Australia (RBA) and Governor Masaaki Shirakawa of the Bank of Japan (BOJ).

Australia’s annual trimmed mean inflation rate - the RBA’s preferred measure - is expected to level off to 3.8% from 4.2%.

“That is still outside the Bank’s target zone of 2-3% but it must be pointed out this fall has been achieved at a time when the AUD has fallen by around 30%. With the labour market weakening and demand contracting, wage and price pressures will continue to ease through 2009,” Westpac economist Bill Evans said.

Indeed, the RBA seems to have put inflation concerns on the backburner since late last year, when the central bank embarked on a rate-cutting cycle that has brought the target rate down by 425 basis points since September 2008.

Market watchers will pay attention to RBA Governor Glenn Stevens’ speech in Sydney next week for hints at what his next move will be.

At its March meeting, the RBA chose to take a breather, leaving rates unchanged at 3.25%. The April meeting followed up with a 25 basis point cut.

Tony Morriss, senior rates strategist at ANZ Bank, said Stevens’ speech is likely to reveal that the RBA plans to stay on the sidelines until the government decides on its budget and other policy actions come into force.

“The curve remains steep to reflect expectations that further official interest rate cuts are likely later in the year,” he said.

Amber Rabinov, foreign exchange economist at ANZ, said Stevens’ speech, as well as the release of the April board meeting minutes, will be the main risk events for the Australian dollar. She said the first-quarter inflation report will probably have little effect in currency markets.

In Japan, the main release will be trade balance results for March. The trade balance is expected to post its eighth consecutive deficit, as demand for Japanese exports plunges around the world. The last report revealed a shrinking deficit, however, as weakening domestic demand has been dragging down imports to Japan as well.

Economists expect the deficit to grow to ¥252.2 billion, against a ¥43.3 billion deficit the month prior.

Early in the week, Bank of Japan Governor Masaaki Shirakawa will speak. The central bank has been continuously upping and prolonging purchases of assets, such as commercial paper and Japanese government bonds, in order to keep liquidity flowing.

However, the primary focus of the Japanese government is now on the implementation of a substantial fiscal stimulus program.

All times in EDT.

Sunday:

21:30 AU Producer Price Index (Q/Q) Q1 Exp: +0.6% Prior: +1.3%

21:30 AU Producer Price Index (Y/Y) Q1 Exp: +4.9% Prior: +6.4%

Monday:

1:00 JP Leading Index CI February Final Exp: +75.2 Prior: +75.2

1:00 JP Coincident Index CI February Final Exp: 86.0 Prior: 86.8

2:00 JP BOJ Governor Shirakawa to Speak at Trust Banks’ Meeting

3:00 JP Convenience Store Sales (Y/Y) March Prior: +2.0%

18:45 NZ Visitor Arrivals March Prior: +2.9%

21:30 AU Reserve Bank’s Board April Minutes

23:30 AU RBA Governor Stevens Speaks in Adelaide

Tuesday:

19:50 JP Merchandise Trade Balance Total March Exp: -¥9.8B Prior: +¥82.4B Revised: ¥82.1B

19:50 JP Adjusted Merchandise Trade Balance March Exp: -¥252.2B Prior: -¥43.3B

19:50 JP Merchandise Trade Exports (Y/Y) March Exp: -46.6 Prior: -49.4

19:50 JP Merchandise Trade Imports (Y/Y) March Exp: -37.3 Prior: -43.0

21:00 AU DEWR Skilled Vacancies (M/M) April Prior: -10.8%

21:30 AU Consumer Prices (Q/Q) Q1 Exp: +0.5% Prior: -0.3%

21:30 AU Consumer Prices (Y/Y) Q1 Exp: +2.8% Prior: +3.7%

21:30 AU RBA Trimmed Mean (Q/Q) Q1 Exp: +0.8% Prior: +0.6%

21:30 AU RBA Trimmed Mean (Y/Y) Q1 Exp: +3.8% Prior: +4.2%

21:30 AU RBA Weighted Median (Q/Q) Q1 Exp: +0.8% Prior: +0.9%

21:30 AU RBA Weighted Median (Y/Y) Q1 Exp: +4.0% Prior: +4.5%

Wednesday:

1:00 JP Supermarket Sales (Y/Y) March Prior: -5.4%

19:50 JP Foreign Buying Japan Bonds W/E April 17 Prior: -¥169.3B

19:50 JP Foreign Buying Japan Stocks W/E April 17 Prior: +¥114.5B

19:50 JP Japan Buying Foreign Stocks W/E April 17 Prior: +¥7.9B

19:50 JP Japan Buying Foreign Bonds W/E April 17 Prior: +¥818.3B

21:30 AU New Motor Vehicle Sales (M/M) March Prior: -3.5%

21:30 AU New Motor Vehicle Sales (Y/Y) March Prior: -18.6%

23:00 NZ Credit Card Spending (Y/Y) March Prior: -1.9%

Thursday:

JP BOJ Governor Shirakawa to Speak at Japan Society in New York

19:50 JP Corp Service Price (Y/Y) March Exp: -2.6% Prior: -2.6%

19:50 JP All Industry Activity Index (M/M) February Exp: -2.1% Prior: -1.7%

Friday: No data expected to be released in Asia or Australia

By Megan Ainscow, mainscow@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca

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Posted in Categories: Australia, Economy, Japan, Releases, USA.

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