The Australian stock market has opened close to where it finished last week as investors contemplate the risk of pushing the ASX 200 index into new high ground for the year.

The fact that the coup in Turkey failed has seen markets recover from nervousness at the close of trade in the US on Saturday morning Australian time.

The economic track record for the US in the second quarter is looking better all the time. Another set of strong retail sales data for June confirms solid growth in US consumer spending. With the services and housing sectors also doing well, the US domestic economy looks a good news story for global growth. This follows Friday’s better than expected data on China’s retails sales. The key question for markets will now be whether this momentum can be maintained after the Brexit vote and its possible impact on confidence.

Inflation data in the US was broadly in line with expectations in the US but disappointed in New Zealand. However, these data points reveal a similar story. Price increases in non-tradable items continue. In fact in the US, services inflation has hit post a GFC high. However in both cases, soft world growth and excess capacity is offsetting the domestic situation with tradable goods inflation remaining a problem.  This is keeping the Fed from tightening policy while in New Zealand’s case the miss on inflation compared to expectations has increased the chances that the RBNZ will cut rates at its August meeting. In a similar vein, the release of Australia’s inflation data next week looms as a key market event.