Fears of economic instability in the Eurozone are sending shockwaves through the Australian stock market, as the world sweats over whether Britain will bail on the European Union.
Polling ahead of the "Brexit" referendum rocked European and US stocks on Friday, setting Australia up for a fall when the market reopens on Tuesday, AMP Capital chief economist Shane Oliver said.
Dr Oliver said lingering uncertainty over the June 23 poll was set against a backdrop of weakened commodity prices, with oil and copper values both down.
He predicts the Australian market will open 60 points - or 1.1 per cent - down after the Queen's Birthday long weekend.
"Every time there's evidence that Britain might leave the EU it leads to renewed fears about the stability of the Eurozone, with concerns other countries may be tempted to hold a similar poll," he said.
"You start to see a retreat to safety where share markets go down, bond yields fall, and investors switch out of shares and into bonds.
"We've also seen a rise in the value of the US dollar, putting the squeeze on commodities."
Meanwhile former London Mayor Boris Johnson, leader of the campaign to leave, this week told the ABC that Brexit would be good for Australians and allow them easier access to visas.
"It's a chance for us, in our country, to take back control of all sorts of aspects of our lives including, for instance, immigration policy, which, as you know, at the moment is very heavily skewed towards the European Union, it's very biased," he said.
His comments come despite Malcolm Turnbull's position in favour of Britain remaining in the EU.
"I think what happens is you've got a friendly government who's put all their eggs in this particular basket," Mr Johnson said.
"I've listened carefully to what friends have said in Australia and they see the advantages of us taking back control of our immigration system and huge sums of money."
Numbers
Dr Oliver said all eyes would be on Chinese industrial production figures released on Monday, offering a glimpse into how the nation's economy is tracking, before attention turns to local business confidence and employment figures later in the week.
He said the US Federal Reserve is not expected to tinker with interest rates at a mid-week meeting, but described the looming decision as the first in a series of "event risks" likely to reverberate in Australia.
"There is the Fed's decision in the week ahead, then the Brexit vote the week after, and Spanish election the week after that," Dr Oliver said.
"And then of course we've got the Australian election in early July, and then the Republican and Democratic conventions in the US."
Dr Oliver said the Aussie dollar had been locked on a rollercoaster ride in the past week, which showed no sign of letting up.
"Ultimately I suspect if fears over Brexit continue over the next week we're likely to see downward pressure on the Aussie dollar," he said.
