It’s unclear just how well the Australian share market will respond to the passing of a significant tax reform bill in the US Senate when trade resumes on Monday.
CommSec chief economist Craig James says he expects the local market to start the week higher, with the benchmark S&P/ASX200 up by between 15 and 20 points, supported by rises in commodity prices such as oil and iron ore.
However it’s ‘a little bit uncertain’ just how positively the market will respond to the US Senate’s support for a tax overhaul, he says, which took place on Saturday, Australian time.
‘That will be the real question mark,’ he said.
The US House of Representatives and Senate will now begin working on a common tax bill, with the reforms expected to have a positive flow-on effect for international financial markets, including Australia.
Major indexes closed lower on Wall Street on Friday after it was reported former US national security adviser Michael Flynn would plead guilty to contacting Russians during the election campaign.
The S&P 500 closed 5.36 points, or 0.20 per cent, lower to 2,642.22 while the Dow Jones Industrial Average fell 40.76 points, or 0.17 per cent, to 24,231.59.
There’s plenty of local data on its way this week, with the Australian Bureau of Statistics set to release retail trade figures for October, and the September quarter current account balance figures on Tuesday.
The bureau will also release gross domestic product figures for the quarter on Wednesday, international trade in goods and services figures for October on Thursday and housing finance for the same month on Friday.
The Reserve Bank of Australia will meet on Tuesday and make its latest interest rates decision, with rates expected to remain unchanged at 1.5 per cent.
The benchmark S&P/ASX200 stock index finished Friday 0.33 per cent higher at 5,989.8 points, while the market made a slim 0.1 per cent gain over the course of the week.
The Australian dollar was trading at 75.64 US cents.