A quiet night’s trading has local investors optimistic about trading today, with futures markets indicating a 14 point rise at the open. Against a backdrop of Grexit worries and another solid US reporting session, local factors are likely to dominate action as jobs numbers drop and Australian companies deliver results.
European markets largely held up, despite further indications of a disruptive Greek debt restructuring proposal from the new government. In contrast, US markets were muted, despite good reports from Time Warner, PepsiCo and NVIDIA. Oil and copper fell, along with precious metals, suggesting the Materials and Energy sectors may drag on the market.
All of these factors may be wiped away by employment data for January. After stronger than expected readings in November and December the consensus expectation is for a flat month, with unemployment edging up to 6.2% as the participation rate rises. Any continuation of the job creation momentum could bring sharp reactions in both shares and the Australian dollar, as traders re-think their interest rate cut assumptions.
However, a uniform market move is unlikely given the reports from key companies Telstra, Mirvac, Transurban and Rio Tinto. Telstra has kicked off the day with a 22% lift in profit to $2.09 billion, exceeding estimates around the $2.0 billion mark and pointing to strong start for the telecommunications giant.For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.