ASX set to open higher on Monday

The Australian stock market is expected to open higher by 25 points on Monday reversing some Friday’s losses on the back of better global news.

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The main driver is US payroll figures which showed good jobs growth in the world’s biggest economy.

AMP Capital’s chief economist Shane Oliver said Friday night’s figures showed 209,000 jobs were created in the US in July and the unemployment rate was 4.3 per cent.

He said the strong figures and low wages growth, of just 2.5 per cent, will result in the US Federal Reserve continuing its gradual tightening of monetary policy.

“So that combination of good growth but relatively low inflation is something the sharemarket likes, it’s almost like a Goldilocks economy – not too hot, not too cold, but just right,” Dr Oliver said.

“Not so good for workers but it’s good for the companies.”

The rise in the iron ore price is another factor.

It rose 7.8 per cent last week to US $74.10 per tonne on Friday.

It all points to reasonable start to the week for the ASX, but share trading will start slowly due to Monday’s bank holiday in NSW.

During the week, all eyes will be on the start of the profit reporting season.

One to watch is the CBA full-year’s results on Wednesday.

The bank is expected to report another record profit. Its share price fell 3.6 per cent to $80.72 last week after it was revealed on Thursday the federal government’s financial intelligence unit, AUSTRAC, had accused the lender of more than 53,000 breaches of Australia’s money laundering and counter-terrorism financing laws.

Other data the market will be watching includes the NAB’s business survey on Tuesday and Westpac Consumer Confidence Index on Wednesday.

Globally, China releases its trade figures on Tuesday.

At the close on Friday the benchmark S&P/ASX200 was down 14.5 points, or 0.25 per cent, at 5,720.6 points, while the broader All Ordinaries index was down 13.5 points, or 0.23 per cent, at 5,773.3 points.