Investing.com - Volatility is expected to return to the sharemarket this week as local investors brace for key inflation data, which could solidify an interest rate hike from the Reserve Bank. This comes amid heightened anticipation surrounding the next moves from other major central banks.
Futures indicate a strong start on Monday for the local bourse, with the S&P/ASX 200 set to open up 0.8%, following a solid rebound on Wall Street. The positive sentiment was bolstered by US inflation data that increased bets on the Federal Reserve lowering interest rates by September.
Last week saw wild swings in the sharemarket, triggered by a significant sell-off in the US tech sector that reverberated globally. Although the ASX 200 rallied on Friday, it finished the week down 0.6% and has lost 1.7% since reaching a record high in mid-July.
Australia’s June quarter inflation data, to be released on Wednesday morning, serves as a critical test for the direction of local interest rates. Consensus expectations suggest that trimmed mean inflation rose 1% in the quarter and 4% year-on-year. Any figure higher than this could make it difficult for the Reserve Bank of Australia to maintain the cash rate at 4.35%.
The tech sector will face further scrutiny this week as major US companies like Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), Apple Inc (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT) report their June quarter earnings.
Australia’s profit season begins with Rio Tinto Ltd (ASX:RIO) half-year earnings on Wednesday morning.
Among local companies, Fletcher Building Ltd (ASX:FBU) warned of a NZ$30 million hit to its financial year 2025 earnings due to operational issues with a third-party provider responsible for transporting cement from its manufacturing facility.
Pacific Smiles Group Ltd (ASX:PSQ) has received a revised proposal from Genesis Capital to acquire all of its shares via a scheme of arrangement for $1.90 per share. The revised proposal offers Pacific Smiles shareholders the alternative to receive all or part of the consideration in scrip. The board and its advisers are currently assessing the new proposal.
Adore Beauty Group Ltd (ASX:ABY) has appointed Sacha Laing as CEO. Laing previously served as the chief executive of General Pants and Collete by Colette Hayman. He has also held executive leadership roles with several iconic Australian retail brands, including Country Road and David Jones.
On the bond markets, Australia 10-year rates were at 4.305% while 2-year rates were at 4.108%.