US-China trade talk fortifies market

A POSITIVE open is tipped for the Australian share market today on the back of encouraging trade talks between the US and China.

The benchmark S&P/ASX 200 is expected to climb 53 points when trade resumes today after finishing at 6066.1 points on Friday, CommSec chief economist Craig James said yesterday.

“There’s more optimism around US and China trade talks which will continue this week in Washington,” Mr James said. “The fact they are continuing to talk and progress has been made is very encouraging.”

The optimism has also boosted the Australian dollar which jumped about half a cent to 71.4 US cents after finishing on 70.92 US cents on Friday. The Dow Jones also finished higher by 440 points or 1.7 per cent on Friday.

The release of economic data in the US suggests there’s no need to think about moving interest rates in Australia which is giving comfort to investors, he added.

Investors will be looking out for the Reserve Bank board minutes and the testimony from the Reserve Bank governor which are expected to shed light on interest rates and the Australian economy.

The December quarter wage price index and January’s unemployment figures will also dominate the agenda this week.

There will also be a raft of companies reporting earning results including BHP Billiton, Coles Group, Woolworths Group, Qantas Airways and Sydney Airport.

The price of oil finished the week up 2.2 per cent while there was a modest 2.7 per cent fall in iron ore.