The ASX200 looks set for a strong opening to start the week after the S&P500 climbed by 1.3% on Friday night — its biggest gain in almost a month.
That followed the release of US jobs data for April, which showed the nation’s unemployment hit a 17-year low in April.
But the economy only added 164,000 jobs in April (forecast 193,000), while wage growth also missed expectations.
However, the mixed report card on employment didn’t put a dent in the US dollar’s recent rally, as the greenback still posted gains against the euro and pound.
But with stocks rising and more risk appetite to end the week, the AUD stayed resilient on Friday night to close at 0.7542 US cents.
Bond markets were little-changed, with benchmark US 10-year bond yields holding steady at 2.95%.
Looking ahead, it’s budget week in Australia, while key data overseas will be led by the US and China both report April inflation figures on Thursday.
All eyes will turn to Canberra on Tuesday night (7:30pm AEST) as Australians gear up for this year’s federal budget.
Treasurer Scott Morrison got in early and flagged some of the good parts — including income tax cuts and a rollback of last year’s increase to the Medicare Levy. Here’s a rundown of what else we know is in the budget so far.
Also on Tuesday prior to the budget, the ABS will release March retail sales data.
Retail sales beat expectations in February but the structural challenges facing the sector remain.
And while last Thursday’s strong trade data saw most economists upgrade their forecasts for Q1 GDP growth, Tuesday’s retail print will provide an update on the outlook for domestic consumption — the biggest component of GDP — amid an extended slowdown in the housing market.
On Monday morning NAB will release its business survey for March, which has been showing some month-to-month volatility as sentiment fell sharply in February.
There’s also April job ads data from ANZ on Monday — a leading indicator for the labour market — and housing finance figures from the ABS on Friday.
Looking abroad, most of the action will be on Thursday starting with the Reserve Bank of New Zealand’s interest rate announcement. Rates are expected to be kept on hold at 1.75%.
That’s followed by a data deluge from China, headlined by the release of April inflation (forecast to slow to 1.9%). There’s also figures for the total money supply, aggregate financing and new loan issuance.
Then on Thursday night, markets will be focused on the US inflation print. Annual core inflation is expected to climb into the US Fed’s 2-3% target range with a reading of 2.1%.
But ANZ’s currency strategists think it’s unlikely to provide a catalyst for the USD, with the data unlikely to alter the Fed’s current plans to hike rates two more times this year.
And rounding out a big day on Thursday the Bank of England is scheduled to make its interest rates announcement.
Here’s the full schedule of data and events for the week ahead (via ANZ):
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