Developments in the US on these fronts will have a direct impact on Australia’s sharemarket, local investors said.

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“The markets [are] actually moving on daily headlines at the moment,” said Wilson Asset Management senior investment analyst Shaun Weick.

“It’s the unknowns that are worrying people ... [This] week, there’s probably a continuation of similar themes in that markets are likely to remain fairly tentative and focused on the situations unfolding in the US.”

Wall Street closed higher on Friday, with the S&P 500 lifting 0.6 per cent, marking its second straight weekly gain. The Dow Jones Industrial Average rose 0.4 per cent and the tech-heavy Nasdaq finished 0.3 per cent higher. The ASX ended 0.2 per cent lower at the end of last week.

Closer to home, local investors will also keep watch on monthly consumer price index data to be released on Wednesday that will give an indicator about how the RBA may move in its next interest rate decision.

“After January’s reading of 7.4 per cent, the Reserve bank of Australia has stated that inflation has peaked, raising investor hopes that a pause in its tightening cycle is in sight and another fall in inflation will be key for investor confidence,” said eToro market analyst Josh Gilbert.

“Expectations are for February’s monthly inflation reading to come in at 7.1 per cent, falling significantly from December’s peak of 8.4 per cent.”

Tribeca Investment Partners lead portfolio manager Jun Bei Liu is optimistic the local sharemarket will be less rocky in the week ahead than in the past month.

“There might be volatility, but it’s nothing like what we saw [last] week,” she said.

“Central banks [have] been very clear in what they want to do, which is supporting, which is to stabilise the markets. They don’t want to see any cracks happening in the financial system.

“[The RBA is giving indications] they are pragmatic and coming to the party to see how things might eventuate.”

With AP, Reuters

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