The week ahead was packed with market-moving data and events both here and abroad, ASB senior economist Nick Tuffley said yesterday.
Yesterday, the New Zealand building consents were out in the morning followed by the ANZ monthly Business Outlook which showed business confidence rising for the third consecutive month.
The main local focus was on tomorrow morning's GlobalDairyTrade auction and the Terms of Trade.
Dairy futures were pointing to a lift of about 5% in whole milk powder prices at the auction, he said.
ASB expected data to show a 2.4% fall in New Zealand's Terms of Trade for the September quarter.
Rising import prices were likely to explain most of the quarter's fall.
In contrast, export prices were likely to post a small lift as prices of non-dairy exports were firm over the quarter, he said.
In Australia, highlights were the Reserve Bank of Australia's meeting this afternoon and third-quarter data on Thursday.
RBA governor Glenn Stevens had all but ruled out a rate cut by suggesting ''chill out and see what the data says''.
The Australian dollar was trading lower ahead of the RBA's decision, trading at US71.74c at noon.
The Aussie dollar had not gained ground since falling on disappointing September quarter capital expenditure data last week as traders keenly awaited the RBA decision.
Australia's economic growth would come in at 0.75% for September or a below trend of 2.25% to 2.5% on an annual basis.
Craigs Investment Partners broker Chris Timms expected the European Central Bank meeting to be the highlight of the week.
The ECB will meet on Thursday with the outcome likely to be known in the early hours of Friday New Zealand time.
Expectations of aggressive easing were running high, with shares higher and bond yields and the euro lower as a result.
While the ECB had been quite clear in its intentions to do more, there was a growing risk of some of those moves reversing should the market be disappointed, he said.
The two-year German bond yield fell to -0.4% last week and the five-year rate fell to -0.2%.
Short-term euro-zone rates fell to record lows last week as markets speculated there could be the emergence of two-tier deposit rates.
The current deposit rate was -0.2% and it could be cut to as low as -0.35%, or there could be another tier of -0.5% introduced.
''This approach will limit the pain of negative deposit rates on the banking system, particularly for banks that keep more cash with the ECB such as those in Germany and France.''
The United States jobs report on Friday could seal the deal on a December rate rise by the Federal Reserve, Mr Timms said.
Market pricing currently implied a 72% chance of a lift in December and that seemed likely.
The November non-farm payrolls report would be the last significant piece of data for the Fed to peruse before its meeting on December 15-16.
Last month, the jobs report was very strong at 271,000 and the headline unemployment rate fell to 5% - the lowest level since April 2008, he said.
Key events
Today: Reserve Bank of Australia meeting and Australian building approvals.
Wednesday: GlobalDairyTrade auction, European inflation, Australian economic growth.
Thursday: ECB rate decision and briefing, Australian international trade, New Zealand building work put in place.
Friday: US non-farm payrolls and trade balance, Australian retail sales.
