A host of business figures and a Reserve Bank of Australia board meeting are expected to be overshadowed by events in Ukraine this week.
Australian stocks are set to gain a head start in the week after Wall Street saw something of a relief rally on Friday to wrap up a volatile week of trading even as Russia’s attack on Ukraine raged.
The U.S. S&P 500 rose 95.95 points, or 2.2%, to 4,384.65, the Dow Jones Industrial Average gained 834.92 points, or 2.5%, to 34,058.75, while the Nasdaq composite rose 221.04 points, or 1.6%, to 13,694.62.
Australian equity futures rose in response, rising 166 points, or 2.38%, to 7118.
Australia’s benchmark S&P/ASX200 closed just 7.2 points, or 0.1% higher at 6,997.8 points on Friday.
On Saturday, the United States, Great Britain, Europe and Canada decided to block the access of certain Russian banks to the international payment system SWIFT.
The measures, which will also include restrictions on the international reserves of the Russian central bank, will be implemented in the coming days.
“We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin,” wrote the leaders of the European Commission, France, Germany, Italy, Great Britain. -Britain, Canada and the United States in the press release.
Economists will be pleased to hear RBA Governor Philip Lowe’s views on the dispute and its impact on Australia’s economic outlook in his post-meeting statement on Tuesday.
The meeting is expected to leave the cash rate unchanged at a record high of 0.1%.
AMP Capital chief economist Shane Oliver said Australia’s trade ties with Russia are “insignificant”, with exports accounting for less than 0.1% of GDP, despite seeing three main impacts of the conflict.
Australia’s export earnings could be boosted by higher energy and commodity prices, but soaring oil and petrol prices will put even higher pressures on the cost of living .
Dr Oliver said economic activity could also be affected if global growth slows, affecting confidence and export demand.
There’s a deluge of economic reports next week, including the national accounts for the December quarter on Wednesday.
These should show that the economy has recovered significantly from the September quarter contraction caused by the Delta strain lockdowns.
Economists expect the economy to have grown 3% in the December quarter after shrinking 1.9% in the previous three months.
This would bring annual growth to around 3.6%.
Analysts will finalize their forecasts after Monday’s corporate earnings and inventory figures and Tuesday’s international trade and public finance reports.
Some uncertainty surrounds the January retail sales outcome on Monday given the disruption caused by the Omicron variant.
Economists’ forecasts focus on a 0.4% increase, although they range from a 3% decline to a 2% increase.
The CoreLogic home value index for February is due on Tuesday and is expected to see another modest 0.3% increase as affordability concerns, rising fixed-rate mortgages and tightening credit conditions continue to slow the rise in prices.
However, house prices were still 22.4% higher in the year to January.
Australian Associated Press