Labour figures, payroll data, RBA comments to garner attention

The ASX is expected to have an unremarkable opening on Monday, although labour force and payroll data, and comments by the RBA deputy governor will be closely examined this week.

Buoyancy on the US markets to end last week is unlikely to trigger much activity at the ASX’s Monday open. Picture: Gaye Gerard

Australian markets are expected to open mostly flat on Monday, as futures are pointing to a small bump on open after a soft end to the week.

Futures markets suggest a modest gain of 0.07 per cent is likely for the ASX 200, which closed on Friday at 8283.2 points. The market is still 1.21 per cent off its 52-week highs – gaining 0.84 per cent last week.

US markets continued to gain ground on Friday and all three major indexes were ahead, the Dow and S&P 500 hitting record highs.

Netflix’s earnings results and positive reports on Apple’s iPhone sales in China were both “helping lift the tech space”, said Edward Jones investment strategist Angelo Kourkafas.

Mr Kourkafas said there had also been some positive economic news from China to buoy investors.

Shares in Netflix jumped 11.1 per cent after it announced it had gained 5.1 million subscribers in the past quarter.

Markets in Germany and France also rose following the European Central Bank’s decision on Thursday to cut interest rates for the third time this year, as inflation returns to normal levels.

The Hong Kong and Shanghai markets moved higher on hopes Beijing could reignite the struggling economy, as China’s growth expanded by a slightly better-than-forecast annual rate of 4.6 per cent in the third quarter.

AMP chief economist Shane Oliver cautioned that markets were at risk of “another correction” despite noting the broader trend was “likely to remain up”.

He said stretched valuations were a particular risk for the US tech sector, pointing to sluggish growth in US and Australian markets as well as a potential expansion of conflict in the Middle East as risks.

“October can often see high levels of sharemarket volatility, but beyond that we are coming into a positive time of the year for shares from a seasonal perspective,” he said.

Dr Oliver said although several central banks had cut interest rates, there were “mixed messages” for any potential relief for Australian borrowers and property investors.

“We think a December cut is still possible if underlying inflation comes in much weaker than expected, but our base case remains for the first cut to come in February,” he said.

Investors will be watching Australia’s labour force and payroll data, while Reserve Bank of Australia deputy governor, Andrew Hauser, is set to speak at Commonwealth bank’s global markets conference on Monday.

Dr Oliver said the deputy governor’s remarks would be closely watched for clues about the interest rate outlook.

The annual general meeting season continues this week with insights in the economy from company boards.

Stockland, Magellan, Transurban, Brambles, IAG, South32 and Qantas are among the major companies scheduled to hold AGMs.

Additional reporting: AFP

Originally published as Labour figures, payroll data, RBA comments to garner attention