Australian markets tipped to open up but on track for poor year

THE Australian market is set to open on the up this week, but is on track for an underperforming year overall.

Wall Street and Europe rallied on Friday and that should flow on for a positive start locallytoday, said AMP Capital’s chief economist Shane Oliver. But house prices and jobs data are likely to confirm suspected slowdowns in both sectors, weighing down the year’s overall showing.

“We’ve had a reasonably good start to the year and that was on the back of talk of lower interest rates,” Mr Oliver said.

“But I think as the year proceeds, softer economic growth locally will weigh on the local market and I think the same over the course of the week ahead.”

Improvements could come by the way of a rates cut from the Reserve Bank or more economic stimulus from the federal government.

But with an election on the way in May, both could be some months off yet, Mr Oliver said. He said there were indications of extra tax cuts worth billions, but for them to have an impact they need to be formally announced, the government needs to return to power and get their cuts through the senate.

“And even if Labor wins, it will take some time before they will pass all their measures as well,” he said.

Minutes from the Reserve Bank will be released this week The Aussie dollar is likely to down again after Friday’s rises.