The Australian share market is tipped to open higher on the back of strong performing metals and the United States.
CommSec chief economist Craig James said the futures index was pointing to a 21-point gain at the start of trade on Monday.
‘Iron ore, gold and base metals were all higher on Friday which sets us up for a reasonable day on Monday,’ he told AAP on Sunday.
The only drag on part of the market, he added, was oil down 0.7 per cent.
Mr James said the Aussie dollar was sitting comfortably at 74 US cents after rising a third of a cent on Saturday in New York trade.
‘Over this week 73 to 74 cents should continue to hold,’ he said, noting the major determinate would be what the US does with interest rates.
The Reserve Bank of Australia, which is planning its monthly meeting later this week, won’t touch interest rates, Mr James predicted.
‘We’ve had two consecutive years where the cash rate has remained unchanged, we expect that to continue with the upcoming meeting,’ he said.
The much-discussed drop in housing prices hasn’t got Mr James worried either but notes it’s ‘good news’ for buyers as supply continues to put downward pressure on the market.
‘Fifteen per cent growth last year in Sydney and Melbourne was not sustainable and falls of five to six per cent are not either,’ he said.
‘It’s a normal outworking, nothing to be too concerned over.’
As reporting season starts for major companies Mr James expects a ‘relatively good’ season but ‘nothing sensational’.
It won’t be one of the best in the last four years, he said, but balance sheets are strong.
The major preoccupier for international markets right now, Mr James said, was the simmering trade dispute between China and the US.