Australian shares are set to open lower on Friday following declines on Wall Street overnight as investors monitored renewed geopolitical tensions in the Middle East.
ASX 200 futures were down 152 points, or 1.7%, to 8,746, pointing to a weaker start for the local market.
Overnight in the United States, major benchmark indexes finished lower after Iran said it was still reviewing a new U.S. peace proposal delivered through Pakistani mediators, while tensions escalated again in the Strait of Hormuz despite ongoing diplomatic efforts.
The Dow Jones Industrial Average fell 0.6%, the S&P 500 lost 0.4%, and the Nasdaq Composite slipped 0.1%.
Luka Belobrajdic, economist at Westpac Group, said in Westpac IQ’s Morning Report noted: “Early optimism around a potential U.S.–Iran resolution later unwound on reports of a possible revival of ‘Project Freedom’ and U.S. strikes, though officials emphasised the conflict had not restarted.”
The Australian sharemarket ended higher on Thursday, with the S&P/ASX 200 rising 84.50 points, or 1%, to close at 8,878.1. Seven of the benchmark index’s 11 sectors finished in positive territory.
Investors will also be watching a busy corporate reporting session on Friday, with results due from Macquarie Group, QBE Insurance, News Corp, RE Group and Block.
While no major domestic economic data is scheduled for release, attention will turn to the United States labour market later in the session, with the closely watched April nonfarm payrolls report due at 10:30 pm AEST.
ANZ analysts said expectations for the report pointed to slowing but still positive employment growth.
"Based on median estimates, April nonfarm payrolls are expected to have risen 65k with the unemployment rate steady at 4.3% and average hourly earnings up 0.3% m/m (3.8% y/y). That would be stronger than the zero jobs growth equilibrium that Fed Chair Powell described in March but is still weak given that much of the gain will likely have been in the non-cyclical education and health services sectors. Stripping out ‘eds and meds’, jobs growth is effectively stagnant in an economy where establishments employ 158.6m nonfarm workers.”
Bond markets were mixed, with the Australian 10-year yield edging 0.1% lower to 4.975%, while the two-year yield rose 0.3% to 4.688%.
