Risk came back to life in overnight trading as US share markets regained lost ground and oil spiked more than 4%. The USD also rose after a bout of weakness, and gold fell. The gains came despite flat European retail sales and mixed US numbers.
For the second session in a row the Australian share market may outperform fairly timid futures expectations. After yesterday’s 74 point fall a gain greater than the overnight rise of 27 points seems likely, especially given the strength in energy markets. However, investors may be tempted to sit on their hands ahead of the late morning release of retail sales data. June is forecast to show a modest improvement to 0.3%, giving a Q2 gain of 0.5%. A higher read would set a bullish tone for the session.
The reporting season will deliver full year results for heavy engineer Dow, finance group Suncorp and gamer Tabcorp. This snapshot of key sector performance could have greater influence than normal in what is expected to be light trading ahead of the large number of company reports due next week