Against a backdrop of ongoing bond value destruction, the Greek PM’s latest piece of interpretive dance, and better than expected US jobs data, markets face a turbulent week as they digest a smorgasbord of data. Australian investors face a difficult day, with many looking to the long weekend to act as a circuit breaker to last week’s negative momentum.
China trade data yesterday set a negative tone, with imports collapsing 18% in May. Despite the poor numbers the Shanghai composite jumped again as speculation mounted that China A shares would be included in a key global share market index. However, copper and oil prices are lower, likely putting opening pressure on resource shares. Inflation data due today may shed light on any change of direction for demand in China, and the prospects for Australian trade.
Locally, home lending data is expected to show a drop of 2% in April. Banks shares have led the recent 8% fall in the market, and signs of strength in lending could support. Any impact may be short lived, with employment data due Thursday and a number of consumer and business indicators released this week. While these may drive local responses, global investors will look to Europe as employment, inflation and industrial production numbers are updated.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.