CMC Markets Weekly Report

The Australian Equity markets will look to start the week in positive territory with the SPI Futures closing up 50 pts to 4036.

The market has a lot of domestic and international news to absorb this week. From an Australian point of view, today's Retail trade number will give some indication that the slowing Australian Economy is starting to hold back consumer spending. TD Securities release their inflation gauge and the market will be watching to see if there has been any moderation in inflation .The RBA had made mention that they are still worried by Australia's high inflation rate, which may temper the size of the expected rate cuts.

Tuesday's main feature will be the Melbourne Cup, although for many the only win they will get is through mortgage relief from the expected 50 bpt rate cut. All eyes will be on the rhetoric from the RBA as to the prospects and timing of further cuts. Further cuts are built into the Interest Rate Futures markets and this will help to support Australian equities.

Thursday we see the release of Labour Force number, where the expectation is that this number will start showing signs that employers are shedding staff.

In Stock specific news, NAB and WBC go ex-dividend this week and LEI holds their AGM.

The US Election result on Wednesday or Thursday may determine the tone for the week. There are mixed views on how it will influence the market, although presently an Obama win is being viewed as breath of fresh air. Presently Obama is short odds to win.

Labour force numbers are released on Friday night in the US. There are expectations the numbers will reinforce the fact that US economy remains weak.

European central bank meets this week and like the rest of the world is expected to cut Interest rates. With Europe cutting rates and Australia cutting this week, we could see further downward pressure on the Australian Dollar, which in turn will put pressure on Commodity prices.