The Australian sharemarket is set for a solid rise at the start of trade on Monday.
A rate cut by China on Friday night lifted European and US markets, and this should translate to a roughly 50-point boost in the local market, CommSec chief economist Craig James told AAP on Sunday.
At the close on Friday, the benchmark S&P/ASX200 index was 87.8 points, or 1.67 per cent, higher at 5,351.6, while the broader All Ordinaries index was up 88.5 points, or 1.67 per cent, at 5,388.1.
"Clearly some central banks are keen to keep the global economy moving - so Europe on Thursday said they're going to do what it takes to restore growth, China's cut interest rates, and it's very likely that the US Federal Reserve is going to hold off on rate hikes until the new year," Mr James said.
Here at home, all eyes will be on the mid-week inflation figures being released by the Australian Bureau of Statistics.
A favourable result could pave the way for a Melbourne Cup Day cut to the official interest rate, says Mr James, who is tipping an underlying price increase of around 0.6 or 0.7 per cent on Wednesday.
"That would certainly keep the door open for the Reserve Bank to cut interest rates, particularly after the major banks lifted interest rates because of capital requirements," he said.
On Friday the RBA will release its financial aggregates data for September.
The numbers for August showed housing investors owed major lenders $565.2 billion, up 0.7 per cent from July.
Combined with a rise of 0.6 per cent in July, it was the smallest two-month increase since September and October 2013.
Mr James said cooler housing markets in Sydney and Melbourne, along with the recent lender rate hikes, could push more investors towards high-yield stocks.
"I do think we're going to see a little bit more restraint by investors," he said.
"There was a bit of irrational exuberance by investors about the housing market, particularly in terms of the Sydney and Melbourne markets, and that does look as though it's softening - and that's something to be welcomed by the Reserve Bank."
He expected the Australian dollar to continue trading around 72-73 US cents.
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