Investors are playing the waiting game as uncertainties over North Korea, US tax policy and the French presidential elections cloud the market.
CommSec chief economist Craig James said Australian and international markets ended the week flat as investors waited to see what would happen.
“We saw flat outcomes in Europe and also weakness in the United States,” Mr James told AAP on Sunday.
“President (Donald) Trump also announced he will reveal his tax plans on Wednesday, so basically no one is going to get too far ahead of themselves until they see the detail there.”
The “who’s who” of corporate America will reveal their earning results this week.
“The earnings seasons so far has gone pretty well in the United States, but there are so many companies who are going to be reporting the result, you’d have be a brave investor to position yourself too far ahead,” Mr James said.
The first round of French presidential voting will be known on Monday and Mr James said if far-right candidate Marine Le Pen was knocked out early it would remove some uncertainty from the market.
Australia has benefited from some uncertainty, with the gold price and iron ore price up, but oil dropped substantially.
“It’s all about inflation here in Australia,” Mr James said.
He expects the headline rate of inflation to get back into the Reserve Bank’s target band around 2.2 or 2.3 per cent.
The CPI announcement will be made on Wednesday, trade prices will be announced on Thursday, and producer prices on Friday.
Reserve Bank Governor Philip Lowe will also give a speech on Thursday where he may talk about inflation.
Mr James rejected calls for housing to be included in CPI, after recent data showed national inflation statistics have not included the rapid growth of house prices.
He said the Australian Bureau of Statistics already produced a range of figures that take into account housing.
“I think it’s a pretty reasonable proximation, it’s held us in good stead for a long period of time,” Mr James said.
“You don’t want to see the policy makers or the bean counters wanting to move that one too far.”