News overnight from Wall Street is positive, with all three major benchmarks closing higher following a rally in tech stocks.
The Dow (up 1.3%), the S&P 500 (up 2%) and the Nasdaq (up 2.8%) were all in positive territory at close, with mega-caps like Apple, Microsoft, Tesla and Amazon leading the charge.
Ground gained
This ground has been gained after weeks of sell-offs, as the markets warmed to steady retail sales (up 0.9% in April) and industrial production data (up 1.1% in the same period). Business inventories also rose by a stronger than expected 2.0% in March.
The ASX looks set to follow suit today, with ASX futures up 70 points or 1% to 7181 this morning.
The Aussie dollar also crossed the 70-US-cent threshold once more, landing at 70.20 US cents overnight.
Wages growth data out today
Today heralds the first of two metrics that will be of interest to the two major parties in the election, which are prosecuting a campaign based on the vicissitudes of the economy.
The wages data, if weak, will strengthen the ALP’s argument that an increase to the minimum wage is necessary to stop the lowest-waged workers’ pay going backwards in real terms.
The jobs figures, on the other hand, which are due on Thursday, are expected to show that the unemployment rate has dropped below 4%, the lowest in years. This will feed the Coalition’s narrative that it has presided over a healthy economy.
Wages are the first cab off the rank, with the announcement from the ABS expected today at 11.30am AEST.
A poll of economists expects Australians to have received a pay rise of 0.8% in the March quarter, which moves the annual rate to 2.5% - way below inflation, which we all know is running at 5.1%.
Economists suggest that strong wage growth would give the dollar a bump, but also fuel inflation. Let’s see what the ABS has to say.
Tightening public sector spending
Meanwhile the Coalition has said it will pay down the deficit over the next four years by around a billion dollars, by tightening public sector spending.
Treasurer Josh Frydenberg said an “efficiency dividend”, a mechanism introduced by the Hawke Labor government in the 80s, would raise more than $2 billion over four years.
Currently the efficiency dividend is 1.5%, but if the Coalition were re-elected it would increase that to 2% for the next three years.
"What we are doing is offsetting that spending with an increase in the efficiency dividend by half a per cent, which will raise more than $2.3 billion," Frydenberg said.
"The annual departmental bill across the Commonwealth is about $327 billion. What we're saying is it will be reduced to about $324 billion, as a result of this additional measure."
Labor has indicated that its costings will be released on Thursday.
In other news
Global oil prices fell by close to 2% yesterday, having gained earlier, on news that the US would ease some restrictions on the Venezuelan government, and that this would lift the South American oil producer’s crude output.
Aluminium, lead, tin and zinc were all up by more than 2% in yesterday’s trade.