The Australian stock market is expected to open slightly lower on Monday with the benchmark ASX200 forecast to start the day three points lower.
CommSec chief economist Craig James said a modest gain at the close of trade in the US on Friday pointed to the flat start, even though commodities stocks were mixed and there is uncertainty surrounded the increasing tension between the US and North Korea.
Investors can thank lower than expected US inflation figures for the gain, these helped push up tech stocks, which offset a fall in the US banking sector.
On the data front, Australia’s largest trading partner, China, will reveal if it’s economy is still expanding on Monday when it releases its monthly retail sales, industrial production and investment figures.
“If the data shows the Chinese economy has continued to expand at a healthy clip, that’s clearly positive for us here in Australia,” Mr James said.
Astute investors will also be watching the US for clues about its monetary policy when the Federal Reserve releases the minutes of its last committee meeting on Wednesday.
The Australian dollar will also be focus of much discussion, particularly among local exporters. It has climbed back up against the US dollar after the greenback fell in the face of the lower than expected inflation reading on Friday.
Locally, the Reserve Bank will release the minutes of its last board meeting this week. It’s expected to be a no surprises affair following Reserve Bank governor Philip Lowe’s testimony to the parliamentary hearing on Friday and the bank’s release of its monetary policy earlier in the month.
It is reporting season however, and the bulk of Australia’s companies will report their earnings in the next fortnight. For most investors these will be more instructive than economic data.
At the close on Friday the S&P/ASX200 was down 67.8 points, or 1.18 per cent, at 5,693.1 points and the broader All Ordinaries index was down 67.1 points, or 1.15 per cent, at 5,743.5 points.