The Australian share market looks set to open open more than one per cent lower after Wall Street’s two key indexes plunged more than two per cent in their last session.
At 0700 AEDT on Monday, the share price futures index was down 65 points, or 1.07 per cent, at 6,006.
In the US, fears of how a tightening job market would impact inflation and a surge in bond yields sent investors fleeing equities with the Dow Jones Industrials Average swooning almost 666 points, for its biggest daily percentage loss in 20 months.
It was the biggest daily point fall in the Dow since December 2008 during the financial crisis.
With Friday’s rout, Wall Street’s three major indexes logged their biggest weekly losses in two years, after closing at record highs the previous week. The S&P 500 and Dow saw their worst weeks since early January 2016 while Nasdaq had its worst week since early February 2016, Reuters said.
The Dow Jones Industrial Average fell 2.54 per cent, the S&P 500 lost 2.12 per cent, and the Nasdaq Composite dropped 1.96 per cent, to 7,240.95.
Locally, in economic news on Monday, the ANZ’s monthly job ads figures, the Ai Group’s Australian Performance of Services Index, and the CoreLogic capital city house prices survey for the week just ended are all due out.
In equities, Argo Investments is expected to release its half-year results.
The Australian market on Friday made solid gains after a surge in energy stocks and improvements for the big banks turned around a mixed overnight lead out of the US.
The benchmark S&P/ASX200 index rose 31.3 points, or 0.51 per cent, at 6,121.4 while the broader All Ordinaries index was up 31 points, or 0.5 per cent, at 6,229.8 points.
Meanwhile, the Australian dollar has slipped against its strengthened US counterpart, and is back below 80 US cents.
The local currency was trading at 79.12 US cents at 0700 AEDT on Monday, from 80.01 on Friday.
CURRENCY SNAPSHOT AT 0700 AEDT:
One Australian dollar buys:
* 79.12 US cents, from 80.01 on Friday
* 87.17 Japanese yen, from 87.74 yen
* 63.61 euro cents, from 64.03 euro cents
* 56.09 British pence, from 56.12 pence
* 108.47 NZ cents, from 108.55 cents
The spot price of gold in Sydney at 0700 AEDT was $US1,332.63 per fine ounce, from $US1,347.29 per fine ounce on Friday.
BOND SNAPSHOT AT 0700 AEDT:
* CGS 4.50 per cent April 2020, 2.0041pct, unchanged
* CGS 4.75pct April 2027, 2.7837pct, unchanged
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.12 (implying a yield of 2.88pct), from 97.17 (implying a yield of 2.83pct) on Friday
* March 2018 3-year bond futures contract at 97.80 (2.20pct), from 97.825 (2.175pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)