Australian investors will get to see just how confident local businesses and consumers really are this week after two interest rate cuts and the coalition’s win on tax cuts.
They will also likely see the Australian share market open some 10 points lower on Monday for a soft start to the week, following dips in US and Europe after the local market close on Friday.
The US S&P 500 fell 0.2 per cent despite good news about better-than-expected non-agricultural jobs figures, AMP Capital’s chief economist Shane Oliver said on Sunday.
“The market took that as a sign that the US central bank won’t cut interest rates as much as had been hoped,” Dr Oliver said.
There had been hopes of a 0.5 per cent cut by the US Federal Reserve later this month.
In Australia, the benchmark S&P/ASX200 index on Friday finished up 33.3 points, or 0.5 per cent, at 6751.3. The broader All Ordinaries closed up 30.9 points, or 0.45 per cent, at 6,831.8.
Australian shares closed up two per cent for the week, but are set to follow overseas leads down on Monday.
“I expected it will be down around ten points in line with the the futures, which were down 12,” Dr Oliver said.
The AUD fell slightly against the US dollar as it rose in response to the strong US jobs growth.
On the ASX on Friday, consumer stocks did well after the coalition passed $158 million in tax cuts offering cash handouts of up to $1080 to some Australians this year.
Investors will be watching closely for more insights into Australia’s post-election economic environment this week.
NAB’s business confidence survey for June is due for release on Tuesday, and consumer confidence for July on Wednesday.
Australian job ads, building activity, lending and tourism data are also to be released.
The market is also keenly awaiting the latest inflation readings from the US and China later in the coming week, as well as testimony to the US Congress from the US Federal Reserve Chair Jerome Powell.