US optimism drives strong start to week
The sharemarket is tipped to start strongly on Monday, jumping 55 points on open, after US stocks closed higher on Friday following an unexpectedly strong employment report.
The positive jobs report, which showed 204,000 new jobs were created in October, much more than the expected 125,000, lent weight to views that the world's biggest economy is in better health than previously thought.
The Dow Jones Industrial Average jumped 1.1 per cent, at 15,761.78 points, on Friday, and the Standard & Poor's 500 Index climbed 1.3 per cent, at 1770.61 points.
It also led to speculation at the weekend that the US Federal Reserve may begin "tapering" its multibillion-dollar bond buying program this year, rather than early next year.
As a consequence, the SPI futures index on Sunday showed the Australian sharemarket opening 1 per cent higher.
It comes after the local market shed 0.2 per cent as the Reserve Bank of Australia forecast rising unemployment and below-trend growth in 2014.
The RBA's November statement on monetary policy said a large drop in resource investment and continued strength in the Australian dollar would likely drag on Australia's economy, leaving open the chance of another interest rate cut.
The central bank said gross domestic product would likely rise between 2 and 3 per cent in the year to December 2014, compared with earlier forecasts of economic growth of between 2.5 and 3.5 per cent.
It expects the outlook for inflation to remain "consistent" within the 2-3 per cent target range.
The inflation rate is 2.2 per cent. The official cash rate remains at a historically low 2.5 per cent.
Meanwhile, Chinese data showed industrial output in the world's second biggest economy accelerated in October, while retail sales showed solid gains and inflation remained stable, showing early signs of fourth-quarter strength.
A 10.3 per cent year-on-year gain in production at China's factories, workshops and mines announced by the National Bureau of Statistics marked a marginal acceleration from September, when the indicator showed an increase of 10.2 per cent.
The department store Myer will publish its first-quarter sales results on Wednesday.
The figures will help to shed light on the strength of sales trading in the run-up to the crucial Christmas holiday period.
On Friday, Myer stocks closed at $2.58, up 3.2 per cent for the week. With agencies