Investors appear content to stay in stocks as they wait on the February reporting season. A solid lead from US markets looks likely to deliver a firm start to trading on the Australian exchange.

Good US economic data continues to support stock markets but just not enough to propel the Dow Jones Index past 20,000.

The pickup in US hourly wage growth to 2.9% suggests that the US economy may be entering the next phase of the growth cycle. Parts of the labour market are becoming tight enough to provide workers with more bargaining power. This is a positive for inflation and growth. However this news was at least partly offset by news of a widening trade deficit  that’s likely to be a significant drag on GDP growth this quarter as US trade feels the impact of the stronger $US

Traders are anticipating a gain in Australian building approval data this morning to offset recent weakness in this volatile series. However, the overall trend is likely to remain negative as developers respond to an oversupply of apartments in Brisbane and Melbourne. If today’s data is actually weaker again, it will confirm expectations that residential construction will become a headwind for the Australian economic growth and will be on the negative side of the ledger for the Aussie Dollar.