3 things ASX investors should watch this week

a man with a wide, eager smile on his face holds up three fingers.

There’s a lot of information coming out this week that ASX investors will want to be on top of.

eToro market analyst Josh Gilbert explains three of the most important ones to watch.

Unemployment figures could impact when ASX investors see first rate cuts

On Thursday 18 April, ASX investors will learn how the Aussie labour market is holding up with the release of the March unemployment figures.

Unemployment reached 4.1% in January, a two-year high. But the labour market regained its mojo with unemployment retracing to 3.7% in February.

Gilbert explains, “The reason for this jump in employment despite a continuous economic crush on Australian business is sensible; anyone offered a job in the last two months of 2023 or the very start of this year all headed into the office at approximately the same time.”

With this kind of short-term data distortion, Gilbert notes, “The RBA would be sensible to look at this jump critically before allowing it to influence interest rate decisions.”

He cautioned that ASX investors could see the RBA push the first rate cuts back further than hoped if unemployment remains similarly low this month.

Consensus expectations are for March unemployment to come in at 3.9%.

BHP, Rio Tinto and Pilbara in the spotlight

S&P/ASX 200 Index (ASX: XJO) mining stocks will also be high on ASX investors’ radars as we await production updates from BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Pilbara Minerals Ltd (ASX: PLS).

For BHP Gilbert says, “The focus will be on its iron ore production numbers, and with so much uncertainty around the Chinese economy, iron ore revenues are set to continue declining throughout the year.”

With copper prices on the rise, Gilbert notes, “Copper production looks set to increase, which should lift revenues, offsetting the drop in its iron ore segment.”

As for Rio Tinto, Gilbert says its challenges are similar to BHP’s when it comes to China.

And again, copper is a metal ASX investors will want to watch in this update, with Rio Tinto growing its copper production faster.

Gilbert says this is “one of the reasons that the market expects earnings to grow by 5% in its next semi-annual report, higher than that of BHP’s”.

Then we have ASX 200 lithium miner Pilbara Minerals, which Gilbert says “continues to navigate a challenging lithium market, with a focus on future growth and balance sheet strength over immediate dividends”.

China’s economic data dump

ASX investors will also be keeping an eye on China on Tuesday when the Chinese government releases the nation’s retail sales, industrial production, GDP, and unemployment all in one day.

“This week’s CPI reading once again reiterated that the region would clearly benefit from more stimulus, with inflation close to zero and the property market showing no signs of a turnaround,” Gilbert said.

And ASX investors could see China’s central bank lower rates.

Maybe.

“The PBOC will also meet, and a rate cut may be on the table,” Gilbert said. “But ASX investors shouldn’t get too excited about that, given the yuan’s drop since the start of the year.”

As for the expected results?

“Retail sales are set to rise 4.5%, down from last month’s holiday-driven boost of 5.5%… Industrial production looks set to slow again after last month’s ‘one-off’ jump, with expectations for production to increase by 5.4%.”

The big one to watch is China’s GDP growth.

Gilbert notes that estimates are for GDP in the world’s second-biggest economy to expand 4.9% year on year, down from 5.2% last quarter.

With China’s property sector still dragging on growth, Gilbert says the big question for ASX investors remains, “When will the bad news become enough of a catalyst to drive substantial government action and push a flatlining market into a golden opportunity for investors?”

Stay tuned!

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.