A public holiday in most cities points to a quiet Monday on the ASX, but a raft of data during the week will give economists some clarity over the economy's transition.
SPI futures were up 0.6 per cent, or 30 points, on Sunday evening pointing to a slightly higher market.
Markets are likely to be sensitive to financial stocks, as reports on Deutsche Bank weigh on investor sentiment. The bank was dealt a fresh blow over the weekend when an Italian court charged the company for colluding with an Italian bank to falsify its accounts in 2008.
Deutsche is also attempting to negotiate a $US14 billion fine from US authorities, who accuse the bank of trading in inappropriate financial instruments prior to the global financial crisis. Reports say the fine may be as much as halved.
On Tuesday, the Reserve Bank of Australia meets. Most economists expect the central bank to keep rates on hold, with most keeping an eye on the language of the release to see if there is any change in tone. New governor Philip Lowe is expected to maintain a soft tone following the significant data flow during September. The central bank will be closely watching inflation, the Australian dollar and housing and labour markets.
Also on Tuesday is the release of building approvals figures, with National Australia Bank expecting some decline in the number of approvals from the 11.3 per cent month-on-month surge in July. The market widely expects a 6 per cent decline in approvals.
Retail improvements expected
Retail sales are slated for Wednesday, with economists expecting a slight pick-up following July's very weak read. Sales were unchanged against 0.3 per cent expected monthly increase. Department store turnover drove the figure down last month, but National Australia Bank points out a hefty dip in these figures is usually followed by a sharp jump. "Putting aside statistical volatility, retail sales has been subdued for a number of months now," wrote Tapas Strickland, economist at National Australia Bank over the weekend.
Trade balance figures are out on Thursday and the market is broadly expecting a $2.3 billion deficit.
Overseas, the US non-manufacturing and manufacturing surveys are released on Wednesday and Thursday. But the big one is the non-farm payrolls data out on Friday, which will paint a clearer picture of American employment. The market expects about 175,000 jobs to have been created and the unemployment rate to stay unchanged at 4.9 per cent.
There are also four Federal Open Market Committee (FOMC) speakers presenting on Friday, though these speeches are targeted at an international audience so it is unlikely they will include much direction on future monetary policy moves.
As a side note, the vice-presidential hopefuls are debating on Tuesday in Virginia. While markets are unlikely to take much notice of the debate, the impending US election is increasingly become a market-sensitive risk event. Traders have largely focused on monetary policy in recent months, but the possibility of a Trump presidency has markets poised for a bout of substantial volatility.
In other news, the Chinese yuan became a global reserve currency on Saturday a milestone that is seen breathing life into China's bond markets by prompting estimated inflows of as much as $US1 trillion over the next five years.