Traders eye a more positive start for local shares

Wall Street closed higher on Friday amid simmering tensions between Washington and Beijing and fears over the nation’s ability to recover from the pandemic. US futures were flat on Sunday.

NAB’s markets research teams says investor focus is likely to remain on the virus count in Victoria and, importantly, whether it spreads to other states, especially NSW.

Pepperstone head of research Chris Weston said equities markets, much like governments in their virus response, were at a crossroads.

“Do we pull back? Do we continue to rally from here? There are a lot of unknowns,” Mr Weston said.

“It feels like everyone is pausing for reflection now with what is happening with COVID globally.”

Another heavy week of data begins with the Australian Bureau of Statistics’ latest COVID-19 household impacts survey, which will add colour for the period to the end of June.

NAB business conditions follow on Tuesday with the lender expecting an improvement from their April low. The Westpac-MI Consumer Sentiment Index on Wednesday will help gauge the initial impact of the Melbourne virus shutdown, while weekly payroll jobs and wages for the week ending June 27 should shed a more timely light on the jobs situation than Thursday’s labour force print will.

Economist expectations for June employment figures are mixed.

ANZ says employment should rise by 70,000 in June, and the unemployment rate shift up from 7.1 per cent to 7.3 per cent, while NAB is forecasting a 175,00 increase in employment.

“We think that many more people will rejoin the labour force, such that unemployment will rise to 7.8 per cent despite the lift in employment,” NAB said.

In the US, virus numbers across southern states will remain a focus.

US core CPI on Tuesday is expected to ease further to 1.1 per cent through the year to June, while Wednesday’s readings from the Empire State manufacturing survey for July, as well as industrial production for June, are expected to improve.

Thursday’s retail sales for June are expected to rise 5.6 per cent after a 15.6 per cent leap in May. Consumer sentiment and housing is also expected to gain.

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