Flat open forecast for Aust share market

A flat open is expected for the Australian share market on Monday in line Wall Street’s finish last week, as investors keep an eye on escalating tensions between North Korea and the US.


CommSec chief economist Craig James said while the war of words between US President Donald Trump and North Korean leader Kim Jong Un was unpredictable, any change to the US futures market would have a flow on effect to the Australian market.

“It’s in the background constantly, we check-in on it to make sure nothing’s coming through,” he told AAP on Sunday.

Wall St largely shrugged off worries about North Korea on Friday, with the Dow Jones index closing 0.04 per cent lower, while the broader S&P 500 was 0.06 per cent higher.

In Australia, the S&P/ASX 200 closed 0.47 per cent higher, ending a three-day losing streak, while the Australian dollar closed slightly lower at 79.46 US cents.

However tensions have escalated since, with a US flying a group of bombers and fighter jets north in international airspace over waters east of North Korea.

The Pentagon said the show of force demonstrated the range of military options available to Trump.

In response, North Korea said targeting the US mainland with its rockets was inevitable after “Mr Evil President” Donald Trump called Pyongyang’s leader “rocket man”.

The rhetoric has led investors to safe-haven shares such as gold, Mr James added.

He said results from the New Zealand and German elections were unlikely to surprise investors, while further hints to a US interest rate hike in December might be made by US Federal Reserve chair Janet Yellen in a speech on Tuesday.

Mr James says he will look to March quarter population figures on Wednesday, which will be released by the Australian Bureau of Statistics in a state by state breakdown.

“It will have an impact on businesses, government and planners to confirm current estimates,” he said.