Rise in ASX 200 futures pointing to positive start to trading week for local bourse

Investors will gain a clearer picture of the state of the economy this week with the release of September quarter gross domestic product figures expected to show only a slight pick-up.

GDP figures out on Wednesday are tipped to reflect a small rise in consumer spending. Picture: Getty Images

Investors will gain a clearer picture of the state of the economy this week with the release of September quarter gross domestic product figures expected to show only a slight pick-up and a deepening per capita recession.

The GDP figures out on Wednesday are tipped to reflect a small rise in consumer spending, stronger business investment and another positive contribution to growth from ­exports, but a drag from ­inventories.

AMP chief economist Shane Oliver said annual growth would remain weak at 1 per cent, year on year, with the figure set to highlight that Australia remained in a per capita recession heading into Christmas.

Dr Oliver is tipping per capita GDP will have fallen in eight of the past nine quarters, resulting in a total fall of about 2.2 per cent from a June quarter 2022 high, representing the biggest fall outside of the Covid-19 pandemic since the early 1990s recession. The decline is considered an indicator of falling living standards in Australia on the back of the cost-of-living crisis facing households.

Eurozone shares rose 0.7 per cent on Friday and the US S&P 500 gained 0.6 per cent. The positive global lead saw ASX 200 futures rise 21 points, pointing to a positive start to trade for the local market on Monday.

Global markets continued their trend higher last week despite US president-elect Donald Trump’s tough talk on tariffs.

Australian shares climbed to a new high and ended the week up 0.5 per cent, led by gains in health, property, IT and consumer stocks.

Donald Trump wants billionaire hedge fund manager Scott Bessent as his Treasury secretary. Picture: AFP

US shares also hit a new high helped by mostly solid economic data, expectations of central bank interest rate cuts and reports of a ceasefire between Israel and Hezbollah.

Bond yields fell on the back of hedge fund manager Scott Bessent’s nomination as US Treasury secretary and suggestions he could help mitigate the threat of tariffs posed by the new Trump regime.

Investors have been warned to brace for plenty of twists and turns after Mr Trump’s social media posts last week indicated a 10 per cent tariff on China and 25 per cent tariffs on Mexico and Canada. The threat of tariffs on Mexico and Canada indicated Australia and other countries with free trade agreements with the US may not be safe. This was tempered by Mr Trump’s history of using tariff threats as a negotiating tool and his exposure to a public backlash if punitive trade policies add to the cost of living in the US.

Dr Oliver said easing inflation pressures, central banks cutting rates, China ramping up policy stimulus and prospects for stronger growth in 2025-26 set the scene for reasonable investment returns over the next 6-12 months.

“However, with a still high risk of recession, poor valuations and significant geopolitical risks particularly around the Middle East and Trump’s policies, the next 12 months are likely to be more constrained and rougher than the last year has been,” he said.