Wall Street snapped its string of record highs when it was revealed that the US Senate’s tax plan would delay cuts to the corporate rate until 2019 creating doubts about the prospects for meaningful US fiscal reform.
Up until now, hopes for long-awaited tax cuts had buoyed share prices in the US.
In Australia on Friday, the S&P/ASX 200 index closed 20 points down, or 0.30 per cent lower to finish at 6029 on the back of falls on Wall Street and the iron ore price slipping.
Still, the ASX 200 had gained 70 points during the week with the ASX 200 sitting above 6000 for the first time since the global financial crisis.
With doubts about tax reform hanging over Wall Street, however, the ASX SPI 200 futures are flat at 5955 indicating the market won’t be going anywhere on Monday.
In Australia, investors this week will be closely watching the wage price index on Wednesday. Wage growth has been running at record low levels and, in some sectors, below the rate of inflation. It remains to be seen whether the lift in the minimum wage will have any impact.
Labour force figures on Thursday will be critical too.
Investors will also be watching out for the NAB business conditions survey on Tuesday and the Westpac Consumer Sentiment Index on Wednesday.
Other items to watch out for include the speech RBA Deputy Governor, Guy Debelle. He will be speaking on business investment in Australia on Monday. Luci Ellis, RBA Assistant Governor, will be speaking on Wednesday evening.