DIARY: Aussie Rates Decision To Dominate

Central bank meetings in Australia, the UK and Europe will dominate the coming week.

That's along with Chinese economic data for January, as well as US 4th quarter profit reports, Australian interim profit reports and various bits of data on inflation, retail sales and employment, which will hopefully contribute to another good week for markets and investors.

In Australia, tomorrow's RBA board meeting is the major event.

A majority of economists surveyed by the likes of AAP, Reuters and Bloomberg tip a rate cut of 0.25% with the cash rate moving down to 4%.

There is a slim chance the central bank won't cut, but will leave rates unchanged until March, but that's only a slim chance according to economists.

And if there's a rate cut, watch for the now usual brawl to erupt over whether the banks pass on all, or some, or none of the reduction to housing mortgages (thus ignoring credit cards, small business and especially saving rates).

The RBA also produces its first review of monetary policy on Friday, which will contain new forecasts for growth and inflation.

Those forecasts for growth are expected to be lowered.

The RBA board meeting tomorrow will have those staff forecasts available for discussion about the level of interest rates.

Federal Parliament resumes today and the big issue will be the leadership of the ALP.

As well as this meeting, we can expect retail sales for December (due today) to have remained sluggish and ANZ job ads for January (also today) and consumer confidence for this month (out Wednesday) to remain soft.

In the corporate area, full year results from Rio Tinto on Thursday and the interim profit report from BHP Billiton the day before, will dominate the local reporting season which steps up several gears this week.

Besides BHP and Rio, Cochlear and Telstra report this week (both interims), as do Transurban, Stockland, Newcrest, Boral, News Corp, Bradken, Tabcorp and Ansell, while we get trading updates from the National Australia Bank and Macquarie Bank.

AMP Global Investors' chief economist Dr Shane Oliver says that results overall are likely to be weak with soft domestic demand, cost pressures, weak commodity prices and the strong Australian dollar all weighing.

He says retailing, manufacturing and housing related sectors are all likely to be weak and while resource profits are likely to remain strong, growth will be sluggish thanks to high base effects and weakening iron ore and coal prices late last year.

"Although the consensus is for 7.8% earnings growth in 2011-12, profit growth in the December half could be near zero," Dr Oliver wrote at the weekend.

"The downside risks are seen to be high, but perhaps the saving grace might be that this is already widely expected and when everyone expects a bad outcome there is some scope for a positive surprise."

Company meetings include: Connxion Ltd, Altius Mining Ltd, Ruralco Holdings Ltd, DoloMatrix International Ltd, TriAusMin Ltd, Probiomics Ltd and Kidman Resources Ltd.

In Asia Chinese, economic data for January will be released but caution is required as it may have been distorted by the early timing of the Chinese New Year holiday week.

Dr Oliver says we can expect inflation data (due Thursday) to show a further moderation to 4% and export and import data (Friday) to be particularly soft.

The Bank of Korea will also announce an interest rate decision, while Indian industrial-production data, and Japanese machinery orders and balance-of-payments figures are due for release.

On the corporate front car giants Toyota Motor Corp. and Nissan Motor announce third quarter results Tuesday and Wednesday respectively.

A number of other Japanese companies will report and the weak earnings trend will continue.

In Europe, the Bank of England is expected to leave interest rates on hold, but possibly announce an extension to its quantitative easing program when it meets on Thursday.

Other economists say that there's a chance the bank could cut rates by 0.25% to 1% instead of a further easing.

The ECB also meets Thursday and should be cutting interest rates again but it might reserve its next bout of stimulus to the next handout of cheap loans to banks under its Long Term Refinancing Operations later this month.

Xstrata, which is in merger talks with 34% shareholder Glencore, is due to report its full year earnings on Tuesday in London and Switzerland.

Oil giant BP is due to announce its 4th quarter figures this week as well as a number of other major European and UK groups.

In the US the 4th quarter earning reporting season enters the final weeks.

A total of 66 Standard & Poor's 500 companies are expected to report, including Time Warner, News Corp, Walt Disney Co, KKR, Habro, Coca-Cola Co and Cisco Systems Inc.

NYSE Euronext (owner of the New York Stock Exchange) is also due to report results after the exchange terminated merger plans with Deutsche Boerse on Thursday.

Reuters says that so far 283 companies in the S&P 500 have reported results, with 60% posting earnings that have topped Wall Street expectations, a lower percentage than seen in recent quarters through this stage of the reporting season.

A quiet week for economic data with only the Thomson Reuters/University of Michigan's consumer sentiment index and international trade figures due for release.