Australian shares set for nervous start to Budget week
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The news: The Australian sharemarket is set to start on a subdued note for the week despite gains for Wall Street on Friday, as investors await details from the federal Budget on Tuesday.
The numbers: The Dow Jones index ended 0.32% higher on Friday, stretching its winning streak to eight straight sessions, while the broader S&P 500 gained 0.16% and the tech-heavy Nasdaq edged 0.03% lower. In the local market, ASX 200 futures were down 15 points or 0.19% at 7,765 points at 7:00am AEST on Monday.
The context: US stocks eked out modest gains on Friday as investors parsed comments from Federal Reserve officials and looked ahead to crucial inflation data in the coming week.
Hints of progress toward the Fed’s inflation target will come this week when the US Labor Department releases its consumer and producer price indexes (CPI and PPI). Analysts expect the crucial CPI report to show underlying core price of 3.6% year-on-year, which would be the coolest reading in over three years.
In the local market too, investors are anticipating a likely budget surplus and cost-of-living relief measures that could bolster the case for the RBA to keep interest rates high as it fights inflation.
The source: Reuters
