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Headlines:
ASX Opening Higher: The Australian sharemarket is set to open higher on Monday, with S&P/ASX 200 (ASX:XJO) futures indicating a 0.8% gain, following a strong rally in the previous session and amidst ongoing recovery from recent declines.
Earnings Reports and Economic Data: Key earnings reports from major ASX companies like JB Hi-Fi (ASX:JBH), AGL Energy (ASX:AGL), Origin Energy (ASX:ORG), and Telstra (ASX:TLS) will provide insights into the financial health of the market, while wage and employment data in Australia and potential interest rate cuts by the Reserve Bank of New Zealand (RBNZ) will be closely watched.
U.S. Market and Fed Expectations: In the U.S., earnings reports from companies such as Barrick Gold (NYSE:GOLD), Home Depot (NYSE:HD), Walmart (NYSE:WMT), and UBS (NYSE:UBS), along with consumer price index data, will influence expectations for Federal Reserve rate cuts, with futures suggesting a 48% chance of a half-point reduction in September.
The Australian sharemarket is expected to open higher on Monday, with futures on the S&P/ASX 200 (ASX:XJO) pointing to a gain of 0.8% or 59 points. This comes after a 1.3% rally in the previous session. However, the market is still recovering from a recent 2% drop, its largest weekly decline since April, driven by recession fears in the United States.
Investors will be closely watching this week’s earnings reports from major ASX companies, including JB Hi-Fi (ASX:JBH), AGL Energy (ASX:AGL), Origin Energy (ASX:ORG), and Telstra (ASX:TLS), for insights into their financial performance and its implications for the broader economy.
Reserve Bank of New Zealand (RBNZ) Expected to Cut Rates
In New Zealand, a weakening economy is likely to prompt the Reserve Bank of New Zealand (RBNZ) to cut interest rates on Wednesday, marking the first reduction in this cycle. Traders see an 84% chance of a quarter-point cut to 5.25%, with some speculating a larger half-point reduction in October. The RBNZ was among the first to tighten policy in 2021 and is now facing pressure to adjust rates in response to cooling economic conditions.
Australian Wage and Employment Data
In Australia, the wage price index data due on Tuesday is expected to show a 0.9% gain for the June quarter, up from 0.8% in March, with an annual increase slowing to 4% from 4.1%. The Reserve Bank of Australia (RBA) is hoping that a cooling wage growth will help bring inflation back to its 2.5% target. On Thursday, the July labour force survey will reveal employment trends, with economists predicting the jobless rate to remain at 4.1% and 12,500 new jobs added, following a 50,200 increase in June.
U.S. Earnings and Economic Data
In the U.S., earnings reports from companies like Barrick Gold (NYSE:GOLD), Home Depot (NYSE:HD), Walmart (NYSE:WMT), and UBS (NYSE:UBS) will be released this week. Additionally, the consumer price index (CPI) data on Wednesday will provide more clues on whether the Federal Reserve will move towards rate cuts in September. Fed futures indicate a 48% chance of a significant half-point cut, reducing the policy rate to a range of 5% to 5.25%.
