The Australian sharemarket could be in for a fairly positive week, taking its cue early on from economic data from China.
CommSec chief economist Craig James says the futures market points to a modest gain this week, on the back of higher European and US markets.
“Fortunately, this time around investors chose to focus on the positives that the US economy is recovering, rather than the negatives that that means that the Federal Reserve is more likely to wind back the stimulus,” he said.
The run of Chinese data starts on Sunday with trade figures – and the Australian and New Zealand markets will be the first to respond to them at Monday’s open.
“It’s a very busy week at the start of the week for Chinese data and that could prove to be a mover of markets, particularly here in Australia given it’s our major trading partner,” James said.
Inflation figures for China will be out on Monday followed by more economic data on Tuesday.
James said investors will be wary about pushing the local market too far on Monday until they consider the Chinese numbers.
“That’s quite important for the scene for our currency, for our major miners and export-related companies,” he said.
Robust US economic data last week was not enough to prevent the Dow Jones Industrial Average and the S&P 500 from snapping an eight-week winning streak, the Dow closing at 16,020.20 points on Friday and the S&P at 1,805.09.
More US data, including retail sales and producer prices, are expected later this week.
On the local front, housing finance figures and the NAB business survey are due on Tuesday and a consumer confidence report on Wednesday.
But the major focus will be Australian job figures on Thursday, with the jobless rate, now at 5.7 per cent, expected to remain steady or edge higher.
“We’re looking for a modest growth of around 5000 in employment,” James said.
“Overall our unemployment rate is getting towards the peak this cycle.
“It should be either steady or just up a smidgin to 5.8 per cent.”
The market has opened a third of a per cent higher this morning.
At 1010 AEDT on Monday, the benchmark S&P/ASX200 index was up 17.9 points, or 0.34 per cent, at 5,203.9, while the broader All Ordinaries index was up 17.1 points, or 0.33 per cent, at 5,203.1.
