Diary: Quieter, But Watch The Markets

What was looking to be a quieter week in business and finance will now be noisier and more fraught thanks to the outbreak of tension and volatility on Friday.

For that reason, it will be a week best spent on the sidelines, if possible, and observing.

There's just no reason for chasing risk.

In Australia, politics will dominate the headlines with the carbon tax debate starting in Federal Parliament this week.

That will generate headlines and no doubt confuse consumers and business even more and further depress confidence levels.

We should also expect the NAB business survey (tomorrow) to show a further softening in conditions and confidence, while Wednesday's Westpac consumer sentiment survey is also expected to show a further drop in consumer confidence.

The July trade balance (out later today) will have remained comfortably in surplus but June quarter housing starts (Wednesday) are likely to have fallen.

Car sales data from the Australian Bureau of Statistics will echo the solid report from the industry earlier last week.

The softness in sentiment and conditions for business and consumer belie the solid growth in consumption in the June quarter and the continuing growth in car sales and overseas travel.

The savings ratio dipped to 10.5% in the June quarter from 11.5% in the first quarter, so money is being spent, but far more selectively.

Myer's full year profit this week (Thursday) is tipped to see a fall of 7.5%.

That fall and the expected negative outlook will again trigger a lot of talk about the softness of retailing, but big, full service department stores such as Myer and David Jones are being ignored by consumers who continue to buy online, buy cars and overseas travel.

Apart from Myer, the corporate area should be fairly quiet this week.

Galaxy Resources reports interim results tomorrow and Aquila Resources is due to announce its full-year results on Friday.

Telstra will hold a number of retail shareholder information meetings ahead of its structural separation.

Meetings will be held in Hobart and Canberra on Monday, Geelong and Melbourne on Tuesday, Brisbane and the Sunshine Coast on Wednesday, Perth and Newcastle on Thursday, and Sydney on Friday.

Australian corporate meetings (general and extraordinary) this week will include Buccaneer Energy Ltd, Golden Gate Petroleum Ltd, Metal Bank Ltd, Mungana Goldmines, Boulder Steel Ltd, Cape Alumina, East Coast Minerals NL, Cove Resources Ltd and Richmond Mining Ltd.

In Asia, the latest Indian interest-rate decision is possibly the major policy decision.

The Reserve Bank of India is due to hand down its mid-quarter policy decision on Friday.

The RBI has hiked benchmark rates 11 times since March of last year as it battles persistently high inflation.

Another 0.5% rise is tipped on Friday.

The Bank of Japan is due to publish minutes from its August meeting later today, at which it boosted its asset-purchasing program.

The new easing was seen as a move to support the Ministry of Finance's foreign-exchange intervention to push down the yen.

Future economic data is due for release in China, with the flow of reports more staggered than usual.

In the US it should also be a fairly quiet week, but the nervousness in markets will make for tense times.

President Obama's $US 420 billion stimulus plan to boost jobs and confidence will be overtaken by the next round of political infighting over taxes and spending and by the market slide.

The record low for the US 10 year bond of just over 1.89% reached in Friday's sell-off (they recovered to 1.91% by the close) tells us that bond investors believe the US is heading for a recession, but the data doesn't tell us it is, yet.

Data out this week in the US includes retail sales along with the consumer price (0.2% rise in August) and producer price indexes for August.

And especially important will be the regional manufacturing surveys by the Philadelphia Federal Reserve Bank and by the New York Federal Reserve Bank, both of which showed contractions in factory activity last month.

Another fall in both will see economists cut their economic forecasts closer to recession levels.

August industrial production (out on Thursday) is likely to be soft, after the solid rise in July.

Consumer sentiment may improve slightly (out Friday), but the rise, if it comes, will be from very, very depressed to very depressed

Of the 498 of the S&P 500 US companies that have reported second-quarter earnings, 71% have exceeded expectations, according to Thomson Reuters.

On Tuesday, electrical products retailer, Best Buy reports its latest quarterly figures and on Thursday, Blackberry maker Research in Motion Ltd of Canada releases its latest quarterly results.

In Europe the UK's Independent Commission on Banking is scheduled to release its long-awaited report. It could recommend sweeping changes to the way UK banks are structured and regulated.

In the UK, trade balance data for July is published, along with the retail and consumer price indexes for August.

European Monetary Union industrial production data for July is due on Wednesday.

A weak reading will have economists forecasting 'recessionary dip looms'.

As well, the results of the proposed debt swap for Greece will become known, along with possible ratings decisions on a trio of major French banks (see markets story).