The Australian share market is tipped for a modest decline upon opening, following weak leads from North America and Europe.
CommSec chief economist Craig James said the futures index was pointing to a loss of 18 points, while a firming Australian dollar would deter foreign investors putting their money to work in the local market.
“We’ve had some declines across Europe and the United States, so it doesn’t set us up really positively,” Mr James told AAP on Sunday.
“It’s not going to be too negative for the longer-term outlook.”
Mr James said the energy sector could provide some assistance to the market, following a lift in crude oil and base metal prices.
“If there’s going to be an area of support, it will be the energy and mining sector,” he said.
And while ongoing concerns of a trade war between the US and China may be weighing on the global economy, Mr James expects Australia to avoid most of the pain.
“Provided the US and China continue to grow, there is no major concern for us here in Australia,” he said.
“In fact, some of their products are getting more expensive with higher tariffs so it could open opportunities here in Australia.”
However, Mr James said talk of a full-blown trade war was unsettling for business.
The week ahead is all about prices, Mr James said, with the consumer price index expected to be released on Wednesday before export and import prices.
“It’s all about measuring inflation,” Mr James said, tipping the rate to hold close to two per cent.
“We’re gradually seeing the inflation rate edging a little bit closer to that two to three per cent target band.
Mr James said he still believes the Reserve Bank would keep interest rates on hold until at least 2019.