Stronger than expected employment figures from the United States may help the Australian market recover from seven straight days of losses when trading opens.
Figures released from Washington after the Australian market closed on Friday showed 201,000 jobs had been created in the US in August while wage growth picked up 0.4 per cent.
Commonwealth Bank chief economist Craig James says the better than expected numbers will have an impact in Australia on Monday.
‘That’s just cementing expectations that we’re going to see a rate hike by the United States at the end of this month,’ Mr James told AAP.
‘The implications of that are that we saw the US dollar continue to strengthen … that’s positive for us in some sense, it helps the exporters and foreign investors looking at our market.’
As a result of the American job numbers, the Australian dollar lost about a half a cent and was buying just over 70 US cents on Sunday.
Mr James said futures index predictions of a downturn of 23 points may be a touch pessimistic.
‘We’ve had significant declines already,’ he said.
‘Over the last week our market has fallen almost three per cent over the past week and I think some of the more bargain-hunter investors will be looking at our market wit a little bit more favour now.’
Australia’s own jobs figures are expected to be released on Thursday and Mr James said the outlook was good with an unemployment rate somewhere around 5.2 or 5.3 per cent.
Unresolved US-China trade concerns are also expected to continue to play on the market.
‘It could lead to a softer Chinese economy, could actually – if it continues – lead to a slow down in global trade and that would be bad news for us here in Australia,’ Mr James said.
‘That stronger greenback and also the China wobbles has had some implications in terms of the markets.’