DIARY: Aust. Investment, Retail Sales, EU Bonds, UK Budget, US Jobs, Global Manufacturing

A train crash sort of week ahead?

The usual suspects are there: Europe, China and the Australian economy and budget position, not to mention the UK's financial and spending outlook.

Europe of course dominates the week once again (see first story), with a number of countries scheduled to hold bond auctions which could trigger more turmoil if they go badly.

In the US we get more data which should show the economy isn't dying like Europe's.

We will also get to find out what a disaster November has been for the markets, after the surprisingly strong showing in October.

On Thursday (December 1) we get updates on the health of manufacturing in most major economies, starting with Australia, then China (two reports), the rest of Asia, Europe and the US.

The surveys are likely to tell us that China is contracting, the rest of Asia is wobbly (especially India), Europe and the UK are mixed to weakening and the US is possibly a bit stronger than a month ago.

Data over the next couple of days from Japan will show that the economy is still in the black, but slowing.

And the UK mid term budget update won't have good news for the government or the economy which will almost certainly slide into recession next year, dragged under by the European economy and the eurozone's woes.

In Australia

The federal government is due to release its Mid Year Economic and Fiscal Review this week.

The AMP's Dr Shane Oliver says that "thanks to weaker growth and new spending commitments, on unchanged policies the budget deficit for this year looks like coming in around $32 bn (or $10bn worse than expected in the May budget) and the 2012-13 budget deficit looks like coming in around $5bn (compared to projections for a $3.5bn surplus).

"To ensure the budget remains on track for surplus in 2012-13 the Government is likely to announce big spending cuts.

"While sticking to the timetable for a return to surplus will help reinforce Australia's fiscal credentials, the risk is that by working in a different direction to monetary policy the fiscal tightening will make it harder to protect Australia against the worsening economic storm brewing in Europe," Dr Oliver warned.

We will also get data for new home sales (due tomorrow) and house prices (Wednesday) and they are expected to again be weak.

Private sector credit data from the RBA on Wednesday will show slow, but positive growth in lending, retail sales (Thursday) and building approvals (Friday).

The retail sales for October on Thursday may be a bit weaker than the solid growth seen in the September quarter and the new private investment data on Wednesday will probably be a surprise for markets with solid actual investment and continuing high levels of planned spending by business.

The 2011 June 30 AGM season ends this week with hundreds of meetings today, tomorrow and Wednesday, mostly all small speculative miners, low ranking industrials and weak financial groups.

The major earnings result will be the interim from the fast growing mining services and testing group, Campbell Brothers tomorrow.

Retail wholesaler Metcash also releases interim profit figures tomorrow.

Some notable meetings this week will come from Harvey Norman Holdings Ltd, Brickworks Ltd, Biota Holdings Ltd, Penrice Soda Holdings Ltd, Sandfire Resources Ltd, Clime Capital Ltd, Brierty Ltd, Photon Group Ltd, Farm Pride Foods Ltd, Premier Investments Ltd, pSivida Corp, Brockman Resources Ltd, Centro Retail Trust, Centro Property Trust, Lynas Corporation Ltd, OrotonGroup Ltd, Gloucester Coal, Mothercare Australia Ltd, AJ Lucas Group Ltd, FlexiGroup Ltd, Nufarm Ltd and Washington H Soul Pattinson.

In the US

Regional surveys suggest a slight rise in the manufacturing survey for November (due Thursday) and on Friday the all important November jobless and employment data.

The AMP's Dr Oliver says we can expect a "solid rise in non-farm payrolls of around 120,000 jobs".

Other data releases this week will be new home sales (Monday), house prices (Tuesday), pending home sales (Wednesday) and consumer confidence (Tuesday).

And car sales data from the industry will be released on Thursday night, our time.

The US Federal Reserve will release its beige book - its report on current US economic activity, for the meeting of the Fed later in December.

The US third quarter earnings season is all but over.

In Asia

The Japanese data on retail sales, employment and industrial production will be out on Wednesday.

On Friday inflation data confirmed that the Japanese economy returned to a deflationary stance in October with the CPI down 0.1% for the month.

The industrial production data will be eagerly awaited to see if it matches the unexpected fall in exports in October. Production fell 4% in September.

Later Wednesday, India is due to release its fiscal second-quarter gross domestic product result.

While economists don't expect the Indian economy to show contraction, a further slowing in activity is expected after the 7.7% annual growth rate in the June quarter, which was the weakest growth in six quarters.

In China

The official government manufacturing conditions indicator or PMI (Thursday) is likely to have followed the flash HSBC estimate into weakening in November. Expect an outcome of around 49.8, i.e. down from the 50.4, according to Dr Oliver. The HSBC final estimate will also be released the same day.

Dr Oliver says both will be at a level consistent with a soft landing, but lower than the October readings.

In Europe

We have meetings of different EU and eurozone groups, the most important looks like being the one involving eurozone finance ministers tomorrow night.

A big test will come when Italy, Spain, France and Belgium will each attempt to borrow billions of euros through a string of debt auctions in the face of growing reluctance by investors to hold even the safest European debt.

After the surge in yields on Italian debt to more than 8% on Friday, Belgium's downgrade and the jump in German yields after the failure of a 10 year bond auction last Wednesday, the sales will be a huge test of confidence.

Later in the week European Central Bank head, Mario Draghi presents the bank's annual report to the European Parliament and it will be his first appearance before that body in his new role.

We can expect him to be questioned on the eurozone crisis and whether the central bank should be a lender of last resort to the zone as a whole, as more and more people want it to be to avoid the collapse of the euro.

European Union consumer confidence data for November is due for release during the week, along with industrial and economic confidence data.

Eurozone unemployment data rounds off a big Wednesday offshore.

In the UK

We will see the British Chancellor George Osborne deliver his autumn statement which could hardly come at a worse time.

The update will be gloomy and it will contain bad news for the government's austerity plans: they are running behind schedule, meaning more gloom and cutting to come in 2012 if they are to be met.

But the UK is sick, growth is flat, and the economy may well slip into recession again next year.

Unemployment is rising and exports, the only real positive for the economy, are struggling as the eurozone (which takes 40% or all UK exports) slides into a recession.

Inflation remains high, and the Bank of England is spending billions of pounds more to try and keep the economy afloat.

The deficit is huge - more than 10% of GDP - and targets to reduce it look set to be missed.

The government will announce some spending moves to try and offset the impact of cuts and the downturn on small business and to assist unemployed youth, now at a record 21%.

The Bank of England also releases its latest financial stability report on the financial system.

It won't make pretty reading.