Australian shares are tipped to open lower after Donald Trump’s comments about the US-China trade war talks pushed US and European markets lower.

August 11, 2019

The Australian share market is tipped to start the week lower after renewed jitters over the US-China trade war dampened US and European markets.

Both markets had fallen at the close on Friday after Donald’s Trump’s mixed message over next month’s China trade talks spooked investors.

The S&P 500 lost 19.3 points or 0.66 per cent, the Dow fell 90.6 points or 0.34 per cent, the Nasdaq dropped 80 points, or 1.0 per cent, and Europe was down 1.2 per cent.

AMP Capital’s chief economist Shane Oliver says the worry has set the ASX up for a negative kick-off on Monday, which he expects to open down 20 points, or 0.3 per cent.

“Not a dramatic fall, just a continuation of the weakness we saw last week,” he told AAP.

The Australian dollar is also doing it tough, down from 68.16 US cents on Friday afternoon to 67.79 US cents on Saturday morning.

“That’s on the back of all those worries about a trade war globally affecting export,” Dr Oliver said.

An increase in the oil price coupled with falls in the price of gold, copper and iron ore have also contributed.

As have Reserve Bank governor Philip Lowe’s comments that interest rates could reach zero, Dr Oliver said.

All eyes will be on electronics retailer JB Hi-Fi when it releases its annual report on Monday.

“They’ll be important to watch for prospects for the retail sector … they’ve got a good business model so they’ll probably continue to do well,” Dr Oliver said.

“The main interest will be what they say about the outlook in terms of households getting those tax refunds and whether they’re seeing much evidence that money is being spent.”

On Wednesday, the June quarter wages data is expected to show continued subdued growth, with a 0.6 per cent rise forecast for the quarter and 2.3 per cent for the year.

“There’s a continued lack of growth in wages … it’s depressingly weak,” Dr Oliver said.

Employment growth data on Thursday is also likely to be sobering, with about 10,000 jobs expected to have been created for July – far lower than the 18,000 new workers entering the market.

“It’s slower than the average we’be been seeing over the past few years … we’re probably going to see the unemployment rate rising to 5.3 per cent,” Dr Oliver said.