Australian shares look set for a rough start to the week ahead of an important speech on the economy by Reserve Bank deputy governor Guy Debelle on Tuesday.
Shares could be over one per cent down at Monday’s opening after Wall Street succumbed to another weak session on Friday, led again by a further sell-off in technology companies.
Mr Debelle’s speech comes at a crucial time for the economy after last week’s surprise fall in the unemployment rate, which came just week’s after Australia was confirmed to be in a recession for the first time since the early 1990s.
The jobless rate fell to 6.8 per cent from 7.5 per cent as a further 111,000 people joined the workforce in August.
Prime Minister Scott Morrison said the figures were a “pleasant encouragement”.
“I think there will be hundreds of thousands of more jobs come back in between now and Christmas, particularly if we get this next step right in Victoria,” Mr Morrison told the ABC television’s Insiders program on Sunday.
But he said it hard to say whether the jobless rate will rise from here.
Treasury and the Reserve Bank had forecast the unemployment rate rising to 10 per cent by the end of the year.
Mr Debelle’s speech – The Australian Economy and Monetary Policy – will be scrutinised for any follow-up comment to the Reserve Bank board’s signal that it “continues to consider how further monetary measures could support the recovery” revealed in the minutes of it September meeting.
There has been speculation the central bank could trim the already record low cash rate of just 0.25 per cent.
The interest rate futures market is implying a rate of 0.1 per cent by year’s end.
“We expect further easing by the RBA, possibly at its next meeting (October 6) so as to present a united ‘Team Australia’ front with the federal government as it’s the same day as the budget,” AMP Capital chief economist Shane Oliver said.
The Australian Bureau of Statistics will also release its weekly payroll jobs data on Tuesday and preliminary retail trade numbers for August on Wednesday, two additional series of figures that were set up during the pandemic to give a more frequent gauge on the state of the economy.
Weekly consumer confidence and job vacancies data are also released on Tuesday and Wednesday respectively.
Australian share futures were pointing to a 1.1 per cent decline at Monday’s opening.
Australian shares just managed to end a run of weekly falls at the close on Friday, after again being dragged down by negative sentiment in the US.