Australia election, German GDP, China tech results
The FT's Josh de la Mare on some of the top stories the FT will be watching this week, including Australia's election for a new prime minister, the latest German GDP figures and results from China's leading tech groups - Alibaba and Tencent
Written by Simon Greaves, Jamie Smyth, Alice Hancock and Claire Jones
Here are the top stories we'll be watching this week. The economy and climate change top the agenda in Australia's election. German GDP data will show whether the country's exports are back on track after a tough six months.
Chinese tech giants Alibaba and Tencent bring out their latest earnings figures. And in the UK, results from TUI, Thomas Cook, and EasyJet will shed light on the state of the UK travel market.
First, to Australia, which goes to the polls on Saturday, in an election that will determine the fate of the centre right government led by Prime Minister Scott Morrison. Polls show Labour has a narrow lead, and is favoured to regain power for the first time in six years, a result that would usher in the sixth prime minister in a decade, a remarkable record for a nation that enjoys a strong economy and has not experienced a recession for a quarter of a century.
The main issue in the campaign is the economy, with the Liberal National Coalition promising big tax cuts, and a $100 billion splurge on infrastructure to create jobs. Labour's Bill Shorten plans to match the government's tax cuts, but direct more money to people on low incomes. He wants to phase out tax breaks to high earners to help fund spending on health and education.
A severe drought has put climate change back on the agenda. Labour is promising to reduce emissions by 45% on 2005 levels by 2030. And to promote renewable energy and electric vehicles. The coalition advocates smaller cuts in emissions.
Negative campaigning has been the dominant theme of the election. The coalition claims a Labour government would crash the economy. While Labour warns the coalition will strip vital services of funding.
Political attack adverts dominate the airwaves. And obscene posters have been erected, prompting former Prime Minister Tony Abbott to complain of a new nastiness in politics.
Germany's official Statistics Bureau will publish its first guess at what happened to the world's fourth largest economy in the first quarter of 2019. After a bumper decade, there've been signs that growth is slowing. The latest estimate from the government in Berlin is that the economy will expand over the course of this year by a measly half a percent, a much less impressive rate than in previous years. However, there are some indications that after a tough six months for the country's export machine, manufacturing is beginning to recover.
Since the second half of last year, the German economy has been somewhat out of sorts. What was once the eurozone's economic powerhouse has been weakened by slower global growth and political uncertainty. The expectation then was for this week's German GDP figure for the first quarter to remain rather weak.
However, it seems that the official data doesn't quite marry up with the pessimism seen in the business surveys. We've had industrial output figures out last week that have suggested that there has been some sort of manufacturing recovery in the early months of this year.
China's tech giants, Alibaba and Tencent, report results on Wednesday. The recent moves by the two groups to work with joint investment ventures is a sign of their growing maturity as leaders in this sector. Capital is tightening. And business is shifting from consumer focused apps to enterprise.
The growth in internet users has also slowed down. And investors are tiring of the costs of acquiring new customers.
Alibaba, the e-commerce giant, has seen revenue growth slow sharply in the third quarter. It reported revenue for the year to March 2018 of $39.9 billion. Tencent, China's second most valuable listed company, and the world's biggest gaming company by revenues and users, in March reported fourth quarter profits fell by nearly a third year on year, as it increased spending to restructure after a slowdown in its gaming business. It faced a nine month government suspension on new games licences because of worries over the addictive nature of computer games.
And finally, the state of the UK travel business will be revealed in half year results from travel operators Thomas Cook and TUI, and airline EasyJet. All three have issued profit warnings this year, in a market that's been hit hard by online competition, heavy discounting, overcapacity, and high fuel prices, as well as Brexit.
It's been a torrid year for travel operators and airlines. Thomas Cook issued two profit warnings from 2018. And in February, said it would look to restructure its business and potentially sell its airline.
Since then, whispers of bidders for the airline business have been rife, with Lufthansa issuing interest this week. TUI and EasyJet have likewise issued profit warnings in the past year. TUI blamed the unseasonably hot UK weather last summer, as well as the grounding of the Boeing 737 Max jets.
And EasyJet has fallen victim to the same issues as its competitors, too many seats, depressing value, and higher fuel costs. Brexit has added to the uncertainty, with customers putting off booking holidays, awaiting a Brexit deadline.
Added to this, a customer hunt for value for the pound declining against the euro has meant that more customers are looking to book in the eastern Med, around Turkey, and in Eastern Europe and Bulgaria, rather than the traditional Spanish and Portuguese holidays.
And that's what the week ahead looks like from The Financial Times in London.