While large chunks of the Australian economy are still struggling for momentum, the miners have crawled off the mat and are enjoying something of a surprise mini-boom.
The ASX's metals and mining index jumped again last week and is now at its highest point in more than three years.
Since the start of the year, the broad measure of mining stocks is up 15 per cent, leaving the ASX200's 5 per cent gain in the dust.
The fortunes of the miners and drillers, large and small, are being driven by a spurt in prices across the periodic table.
That in turn has underwritten the 5 per cent rise in the ASX over the past month.
Among the bulks, spot prices for iron ore rose 0.7 per cent on Friday, its third-straight day of gains. Coking coal put on 1.7 per cent.
Zinc has just hit a 10-year high, aluminium has matched its five-year high, while copper prices are up 25 per cent so far this year.
The more obscure atomic numbers have enjoyed healthy buying as well.
From ruthenium — a rare transition metal grouped with platinum and used OLED TV monitors — through to lithium, a favourite of eclectic vehicle speculators, prices have been on the tear.
Wary traders who have been burnt before question just how much more prices can rise.
The fundamentals say speculation is perhaps running ahead of actual demand for many metals, but for the time being the party is continuing.
The recent bounce in steel-making ingredients is particularly surprising given the well ventilated production cuts demanded by Chinese authorities ahead of winter's smog-saturated "heating season".
"Mills haven't started production cuts as much as what we expected earlier, so some traders expected coking coal spot prices won't fall too much," one commodity trader in Shanghai told the Reuters news agency.
It appears steel margins are just too juicy at the moment for many factories to cut production.
Oil glut is clearing
From the organic chemistry side of the divide, oil is bubbling up too, lifting the fortunes of the energy companies.
The global benchmark Brent crude rose more than 2 per cent on Friday and is up almost 40 per cent since its recent low back in June.
US crude hit a two-year high as the drill-rig count experienced its biggest decline in 18 months.
Hedge funds are eyeing an acceleration in Chinese demand and the increasing likelihood Venezuela's state-owned energy company PDVSA will collapse under a mountain of debt as reasons to buy oil futures.
Perhaps the strongest signal the market is coming back into balance is the physical price of oil is rising as well.
Saudi Arabia's oil giant Aramco jacked up its official selling price for the third consecutive month, a fairly clear signal the glut is starting to drain.
Positive start tipped
The solid momentum that saw Australian shares rise 1 per cent last week looks likely to continue when the markets open.
The key US indices posted record highs, with S&P500 and Dow Jones gaining ground for the eighth consecutive week.
Interestingly, while the All Ordinaries has now finally pushed back through the 6,000-point level, it is still a long way shy of its record of almost 6,900 recorded on November 1, 2007, just before the GFC swoon.
Wall Street first hit its pre-GFC high four years ago and fresh records have become an almost daily occurrence.
Is the RBA about to cut … its forecasts?
Unlike a certain horse race on Tuesday, the result of the Reserve Bank's rate-setting meeting is a foregone conclusion — nothing will happen.
The market says there no chance of a change. Those odds are supported by 27 out of 27 economists who have bet on a hold for the 13th straight meeting.
However, the RBA's quarterly Statement on Monetary Policy — a document which details the central bank's current thinking on the economy and frames its key forecasts — is likely to be a far more interesting read.
The RBA has maintained a relentlessly rosy view of the economy, even as it cut its way to the current record-low cash rate of 1.5 per cent.
UBS economist George Tharenou believes the RBA is about to slash its key forecasts for GDP growth and inflation in Friday's SoMP by a hefty 50 basis points, despite a moderate acceleration in growth in the second quarter.
"We see the RBA lowering their numbers because their previous forecasts just had too much of an expected pick-up to 3.25 per cent [year-on-year] for end of 2018 and 3.5 per cent for mid-19," Mr Tharenou wrote over the weekend.
The UBS house view is a cumulative 50 basis points will be lopped of the RBA's inflation forecast as well.
There are a few drivers behind UBS's thinking. Slower GDP growth, the base effect of a weaker than expected Q3 inflation and a reweighting of the way the consumer price index is calculated.
"We also think the RBA may give more focus on the looming entry of Amazon, which we estimate could subtract up to an additional 0.25 percentage points from headline CPI, albeit spread over coming years," Mr Tharenou said.
This should not necessarily be seen as a capitulation from the RBA, just a slow and steady retreat from a lofty position.
"Overall, we think the SoMP is likely to continue the RBA's long 'downgrade cycle', after they already lowered their GDP forecasts in every year since 2011," Mr Tharenou noted.
"Nonetheless, the RBA will likely still continue to project a boom ahead with GDP lift to a well above 'trend' pace over coming years."
Westpac and CBA results
Westpac is the next big bank up to the plate after neither ANZ nor NAB belted the ball out the park with their full-year results in previous weeks.
Indeed, both struck out with investors on the day.
Westpac is expected to table a solid $8.1 billion cash profit on Monday, up 3.6 per cent on last year.
Margins should benefit from pricier investor mortgages and asset quality is likely to improve as well.
Costs should be contained, but that was said about NAB before it announced another $1.5 billion capex spend on top of the existing $3 billion program — oh, and another up to $800 million for redundancy payments next year.
Operating on a different financial calendar, the Commonwealth trots out first-quarter earnings on Wednesday.
Not a lot of detail is expected, but cash earnings should be a respectable $2.6 billion for the quarter, helped along by expanded margins and fewer bad loans.
Explosives maker Orica and wealth manager Janus Henderson also release full-year results on Monday and Thursday respectively, while building products maker James Hardie puts out half-years numbers on Thursday as well.
Aside from the RBA meeting and SoMP, the only other key economic release is September's home loans on Thursday.
August was unexpectedly strong, supported by first-home buyers taking advantage of recent stamp duty exemptions in News South Wales and Victoria.
September could well be softer.
Australia
| Date | Event | Forecast |
|
Monday 6/11/2017 |
Job ads | Oct: ANZ series, leading indicator of employment, was flat last month |
| Westpac FY results | ||
| Orica FY results | Underlying profit around $410m, up 5pc on last year | |
|
Tuesday 7/11/2017 |
RBA meeting | Rates on hold |
| Construction index | Oct: AiG series, activity has been expanding | |
|
Wednesday 8/11/2017 |
CBA update | Q1: $2.6bn cash profit for the quarter tipped |
|
Thursday 9/11/2017 |
Home loans | Sep: May ease back after a strong August |
| James Hardie 1/2 yr result | Higher cost eroded first-quarter profits. May not be a great number | |
| Janus Henderson FY result | Full year underlying profit of $380m forecast | |
| Santos investor briefing | Update on LNG exports will be studied along with commentary about domestic gas supplies | |
|
Friday 10/11/2017 |
RBA SoMP | GDP and inflation forecast may be cut again |
| Bluescope AGM | Investors still happy with the big turnaround |
Overseas
| Date | Event | Forecast |
|
Monday 6/11/2017 |
CH: Current account | Q3: Solid $US50bn surplus |
|
Tuesday 7/11/2017 |
CH: Foreign reserves | Oct: Still above $US3 trillion, so comfortable |
|
Wednesday 8/11/2017 |
CH: Trade balance | Oct: Has narrowed, around $US40bn |
|
Thursday 9/11/2017 |
NZ: RBNZ meeting | No action this month. A hold |
| CH: Inflation | Oct: Not much change in consumer or producer inflation |
