Aust shares to open lower on US nerves
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SYDNEY, Nov 11 AAP
November 11 2012, 3:21PM
The Australian market is expected to open slightly lower this week as the world waits for the US to make a move to avert the fiscal cliff.
The December share price index on the ASX 24 indicates that the market will open 15 points, or 0.33 per cent, lower on Monday.
However, CommSec senior analyst Craig James said while he expected the market to open lower, it would not be as low as the futures contract predicted.
"When you consider the fact that oil was up, gold was up and the iron ore price was up, it may be that we start off a little bit better than what the expectations are," he said.
US stocks closed slightly higher on Friday after upbeat consumer confidence data took the edge off fears about the nation's looming fiscal cliff and the eurozone's simmering debt crisis.
In Europe stock markets steadied and the euro dropped against the dollar.
Mr James said now that the US elections were over and President Barrack Obama was in office for another four years, global markets would be focusing on any moves to avert the fiscal cliff.
"The focus of the week will be on what steps will be taken to ensure the US doesn't fall off the fiscal cliff," he said.
"The market will be watching the leader of the (US) house, the leader of the senate and the president for any guidance."
The US also has a raft of important economic data to be released this week, including the Consumer Price Index and industrial production figures, which economists will be keeping a close eye on.
Locally, the Australian Bureau of Statistics will be releasing its Wage Price Index on Wednesday.
Mr James said the Reserve Bank of Australia (RBA) would closely watch the index as it would come into consideration when deciding whether to cut interest rates in December.
He said if wages rose too high then it was less likely that the central bank would cut interest rates.
"We're expecting a reading of about 0.9 per cent for the quarter and 3.9 over the year," he said.
"I think the Reserve bank would like something closer to 0.7 or 0.8."