The ASX is facing a flat start this morning, as US shares posted minor gains in the lead-up to a long weekend. With US markets closed tonight for Memorial Day, local shares may take a lead from regional markets in Asia. A slew of economic data this week will shed light on the economic recovery home and abroad, while key commodities like iron ore, copper, oil and gold will be in focus amid recent movements.


Economic calendar and news

Headlining the local economic calendar this week will be two events, with the Reserve Bank of Australia convening for its latest interest rate decision, before first-quarter GDP numbers are released on Wednesday.

Although the central bank is not expected to surprise any market pundits, its statement will be important with regards to any change in the rhetoric that accompanies its decision, particularly regarding matters such as inflation and house prices. 

When it comes to GDP forecasts, economists anticipate a solid quarter-on-quarter uptick of 1.5%, although investors will have a better indication on what to expect when data on business inventories, company gross profits and the current account are published tomorrow. 

Elsewhere, there will be data on private sector credit, services and manufacturing activity, home loans, the Balance of Trade, and a final reading for retail sales from April.

Amid the shortened trading week in the US, all eyes will be tuned-in to the jobs figures for May. Last month’s numbers fell significantly short of expectations, even leading some economists to become more confident in the Federal Reserve’s accommodative monetary policy stance. The addition of approximately 600,000 jobs is tipped to be the number released later this week, although whether last month’s miss rolls through this time around remains to be seen.



Stocks on watch

Last week ended with US President Joe Biden announcing his first annual budget, which includes US$6 trillion in spending across infrastructure, health care and education, among other areas. With debt forecast to hit levels higher than during World War Two should the plan receive approval from Congress, gold stocks may continue to be a dominant theme over coming days, with the precious metal ending above US$1900 per ounce, and a number of winners last week.

Despite prices retreating by some margin in recent weeks, iron ore recovered a little on Friday to end the week on a slightly upbeat note. Prices were buoyed by news that China has upped its commitment to control emissions associated with steel production via ministerial oversight. Nonetheless, names like Fortescue Metals (ASX: FMG) may see some renewed attention.

Meanwhile, with copper and aluminium prices on the march, names like South32 (ASX: S32), OZ Minerals (ASX: OZL) and IGO (ASX: IGO) could continue attracting interest, with each already performing particularly well last week.

Travel stocks like Webjet (ASX: WEB), Flight Centre (ASX: FLT) and Corporate Travel Management (ASX: CTD) effectively ignored the lockdown and travel restrictions to come out of Victoria last week. With a decision on whether the lockdown is extended not expected until later in the week, there may be extra trading volume in these shares when the news comes through, with investors likely to bet on whether a restart is on the cards in the near-term.

Fresh after topping the $100 mark and also hitting an all-time high, Commonwealth Bank (ASX: CBA) has also managed to pull-up its peer in Westpac (ASX: WBC), which is trading at a 52-week high. 

Other stocks entering the new week full of momentum and coming off fresh records include Aristocrat Leisure (ASX: ALL), Codan (ASX: CDA), Hub24 (ASX: HUB), Collins Foods (ASX: CKF), Boral (ASX: BLD), QBE (ASX: QBE), Suncorp (ASX: SUN), Computershare (ASX: CPU), Tabcorp (ASX: TAH), and Medibank (ASX: MPL).


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