After a week in which the Australian stock market spiked, plunged and then ended almost unchanged, the bourse is set to open flat amid continued uncertainty around the COVID-19 pandemic.
The S&P/ASX200 benchmark index on Friday dipped 5.3 per cent to 4824.4 points after three consecutive days of solid gains.
The broader All Ordinaries index closed 261 points down, or 5.08 per cent, at 4874.2, with the market up 0.5 per cent over the week.
Yet while futures indexes indicate the ASX will inch up 0.1 per cent on Monday morning, CommSec chief economist Craig James said coronavirus-driven volatility was far from over.
It remained unclear what would happen after Monday’s open.
“What investors really want to see is the vaccine being developed or at least the flattening out of the curve in some of the key nations like Italy, Spain and the US,” Mr James told AAP on Sunday.
“If we saw a flattening out of their curves … that would provide investors with a degree of encouragement.”
US President Donald Trump over the weekend signed into law a $US2.2 trillion ($A3.6 trillion) stimulus measure, but Mr James said the package had already been factored in by Australian markets.
Job figures in the US will be released on Friday with the near-certainty of large unemployment spikes, while in Australia purchasing managers’ indexes will be issued throughout the week.
Investors will also look closely at the federal government’s “hibernation” economic strategy to save businesses amid coronavirus.
But Mr James said “flattening the curve” was the all-important metric.
“If that’s not occurring, we’ve got to see new measures,” he said.
“I don’t think it’s the measures themselves, it’s how they show up in terms of the statistics. If it looks like we’re winning the war against the virus, that will be well greeted by markets.”
The Australian dollar was on Friday buying over 61 US cents for the first time in eight days. By the end of Friday’s close of US markets, one Australian dollar bought 61.65 US cents.