Australian stocks have rebounded following the global sell-off in equities and could see more moves this week amid several data reports on the economy.
The iShares MSCI Australia (NYSEArca: EWA) is down 6% year to date, but rallied about 5% last week, according to Morningstar. [Gold Prices Impacting Single-Country ETFs]
The exchange traded fund is weighted heavily in financials and materials, as Australia’s economy is rooted in mining. [The Contrarian: Single-Country ETFs]
“In Australia, building approvals numbers, retail trade and capital expenditure plans are all down for release ahead of the central bank’s monthly board meeting next week, when it is expected to hold rates steady at 4.75%,” Dow Jones Newswires reported Monday. “If the numbers show any signs of sharp deterioration, analysts expectations of a rate cut by year end will likely grow.”
“The two speed Australian economy will likely be in full view this week. We expect Australian retail sales to be weak reflecting consumer caution while we expect capital spending to be strong reflecting the mining boom,” said Joseph Capurso, FX strategist at Commonwealth Bank of Australia, in the report. [Australia ETF: Commodities Could be the Savior]