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Local shares are pointed higher following a positive end to last week after weak US jobs numbers increased bets the US Federal Reserve will announce further stimulus measures when it meets later this week, but soft Chinese data out yesterday could temper gains.
On the ASX24, the SPI futures index was 18 points higher to 4349. The Aussie dollar was stronger after a day of strong gains on Friday. It was recently buying $US1.037, up from $US1.0323 late on Friday.
What you need to know
- SPI futures are 18 points higher at 4349
- The $A is higher at $US1.037
- In the US on Friday, the S&P500 rose 0.4% to 1437.92
- In Europe, the FTSE100 rose 0.3% to 5794.80
- China iron ore rose $US2 to $US89 a metric tonne
- Gold rose $34.90 to $US1740.50 an ounce
- WTI crude oil rose 89 cents to $US96.42 a barrel
- Reuters/Jefferies CRB index fell 0.17% to 308.28
Myer today reports full-year profit. The under-performing department store chain is expected to report a fall in annual profit of as much as 15 per cent. In May Myer warned that tough trading conditions could lead to a further fall in profit, after initially expecting its profits for the year to July 30 to fall by 10 per cent.
In the US on Friday, new data showed the economy added 96,000 jobs in August, down from a revised gain of 141,000 in July. While the unemployment rate fell to 8.1 per cent from 8.3 per cent in July, that resulted from more people dropping out of the work force.
In China over the weekend, fresh economics data highlighted softness in the nation's economy. Inflation rose slightly during August, retail sales for the year to the end of August eked out a small gain but industrial production fell.
Making news today
In economics news:
- Australian Bureau of Statistics (ABS) housing finance for July
In company news:
- Myer reports full-year profit
- The following companies hold general meetings: Buccaneer Energy, Mamba Minerals, Peak Resources, RUN Corp
- Arrium ex dividend date
- CSG and Acrux record date
Making news this week:
- Tuesday: NAB business confidence and conditions
- Wednesday: Westpac consumer confidence, ABS dwelling starts for the June quarter
Making news offshore this week:
- Monday: China trade balance
- Tuesday: US international trade
- Wednesday: US Federal Open Market Committee begins
- Thursday: US jobless claims for the week of 1 September, US producer price index, US FOMC announcement
- Friday: US consumer price index, retail sales for August, industrial production for August
The dollar
The Australian dollar has risen strongly on weak US data and positive signs of economic growth in China. At 7am, the Australian dollar was trading at $US1.0373, up from $US1.0323 on Friday.
Bank of New Zealand currency strategist Mike Jones said the Australian dollar had several pieces of news keeping it buoyant over the weekend.
‘‘It was a double dose of good news for the global economy which propelled the Aussie higher,’’ he said.‘‘First, there was the weak non-farm payrolls data, which came ahead of calls for more Fed (Federal Reserve) stimulus this week.
‘‘Then, there was a big Chinese construction project launched on Friday, which quashed some of the fears about a slowdown in Chinese activity.’’
How we fared last week
Australian stocks have closed firmer, recovering from one-month lows, with miners leading gains after China approved infrastructure plans worth $150 billion and the European Central Bank announced a long-awaited bond-buying program.
The benchmark S&P/ASX200 index rose 12.9 points, or 0.3 per cent, to 4325.8 points, while the broader All Ordinaries index added 17.2 points, or 0.4 per cent, to 4348.8 points.
The materials sector led the gains, rallying 2.3 per cent. But the market's advance was capped by weakness in the banking sector, which has risen in recent days as investors switched from mining stocks amid falls in metal prices.
BusinessDay with agencies